Financial management

1. MPC AUTONOMOUS COLLEGE BARIPADA
PRESENTATION
ON
DIVIDEND & WORKING CAPITAL
PRESENTED BY
SUDIPTA KUMAR PATRA
ROLL NO 16
SUBMITTED TO
MISS MONALISHA MOHAPATRA
DEPARTMENT OF MBA

2. CONTENTS
DIVIDEND
TYPES OF DIVIDEND
CAPITAL
FIXED CAPITAL
WORKING CAPITAL
WORKING CAPITAL CONCEPT
BALANCE SHEET CONCEPT
OPERATING CYCLE CONCEPT
DETERMINANTS OF WORKING
CAPITAL

3. DIVIDEND
DIVIDEND IS THE DISTRIBUTION OF PORTION
OF PROFIT BY A CORPORATION TO IT’S
SHAREHOLDERS
DIVIDEND CAN ALSO BE DESCRIBED AS A REWARD
THAT PUBLICLY LISTED COMPANIES EXTEND TO
THEIR SHAREHOLDERS AND IT’S SOURCE IS THE
COMPANY’S NET PROFIT

4. SCENARIOS WHEN DIVIDEND PAYOUT IS EXECUTED
LACK OF ENOUGH GROWTH OPPERTUNITIES OR PLAN
FOR NEW INVESTMENT
NOT MANDATORY TO RETAIN EARNINGS DUE TO
CONSISTENCY IN REGULAR CASHFLOW FOR
INVESTMENT
PSYCHOLOGICALLY POSITIVE SENTIMENTS FROM
INVESTORS FOR DIVIDND PAYING COMPANIES

5. TYPES OF DIVIDEND
 PROPOSED DIVIDEND
 INTERIM DIVIDEND
 FINAL DIVIDEND
ON THE BASIS OF TIME PEROD
ON THE BASIS OF CATEGORY OF PAYMENTS
 CASH DIVIDEND
 STOCK DIVIDEND
 SCRIP DIVIDEND
 BOND DIVIDEND
 PROPERTY DIVIDEND

6. PROPOSED DIVIDEND
RECOMMENED
BY BOD(BOARD OF
DIRECTORS)IN
BOARD’S REPORT

7. FINAL DIVIDEND
RECOMMENDED
BY
BOD(BOARD
OF
DIRECTORS)
DECLARED
BY
SHAREHOLDER
S AT
AGM(ANNUAL
GENERAL
MEETING)

8. INTERIM DIVIDEND
RECOMMENDED DECLARED
BY BOD(BOARD
OF
DIRECTORS)IN
BOARD’S REPORT
BY BOD(BOARD
OF
DIRECTORS)

9. CASH DIVIDEND
THE CASH DIVIDEND IS BY FAR THE MOST
COMMON OF THE DIVIDEND USED
THE COMPANIES SHOULD HAVE AN
ADEQUATE RETAINED EARNINGS AND ENOUGH
CASH BALANCE TO PAY THE SHAREHOLDERS IN
CASH

10. STOCK DIVIDEND
THESE TYPES OF DIVIDEND ARE ISSUED
WHEN A COMPANY LACKS OPERATING
CASH,BUT STILL ISSUES,THE COMMON
STOCK TO THE SHAREHOLDERS TO KEEP
THEM HAPPY.

11. SCRIP DIVIDEND
SCRIPS HAVE BEEN USED TO COMPENSATE
OR PAY EMPLOYEES AND IN COMMUNITIES
WHEN MONEY WAS UNAVAILABLE OR IN
SHORT SUPPLY
GIFT CARD, REWARD POINTS AND COUPONS
ARE POPULAR EAMPLE OF SCRIP

12.  IT IS A TYPE OF SCRIP DIVIDEND BUT
IT’S MATURITY TIME IS LONG
 BOND DIVIDEND PROMISES TO PAY
THE SHAREHOLDERS AT A FUTURE
SPECIFIC DATE

13.  THE NAME ITSELF SUGGESTS THAT
PAYMENT OF DIVIDEND TAKES PLACE IN THE
FORM OF PROPERTY
 THIS FORM OF DIVIDEND TAKES PLACE
ONLY WHEN SHAREHOLDERS ARE READY TO
ACCEPT DIVIDEND IN THE FORM OF ASSET

14. CAPITAL
CAPITAL REFERS TO THE FINANCIAL RESOURCES
THAT BUSNESSES CAN USE TO FUND THEIR
OPERATIONS LIKE CASH,MACHINARY,EQUIPMENT
AND OTHER RESOURCES
CAPITAL CAN BE USED TO INCREASE ONE’S
ABILITY AND GENERATE VALUE ACROSS A WIDE
RANGE OF CATEGORIES SUCH AS
FINANCIAL,SOCIAL,PHYSICAL,INTELLECTUAL ETC.

15. CAPITAL CAN BE CLASSIFIED INTO TWO CATEGORIES
 FIXED CAPITAL
 WORKING CAPITAL
TYPES OF CAPITAL

16. FIXED CAPITAL
FIXED CAPITAL IS THE PORTION OF THE
TOTAL CAPITAL OUTLAY THAT IS
INVESTED IN FIXED ASSET THAT STAYS IN
THE BUSINESS ALMOST PERMANENTLY
FIXED CAPITAL DESCRIBES A
COMPANY’S INVESTMENT IN LONGTERM
ASSET

17. WORKING CAPITAL
WORKING CAPITAL REFERS TO THE PART OF
FIRM’S CAPITAL WHICH IS REQUIRED FOR
FINANCING SHORTTERM OR CURRENT ASSET SUCH
AS CASH,MARKETABLE SECURITIES,DEBTOR AND
INVENTORIES
IT IS ALSO KNOWN AS REVOLVING OR
CIRCULATORY OR SHORTTERM CAPITAL

18. WORKING CAPITAL CONCEPT
WORKING CAITAL
CONCEPT
BALANCE SHEET
CONCEPT
OPERATING CYCLE
CONCEPT

19. BALANCE SHEET CONCEPT
BALANCE
SHEET
CONCEPT
GROSS
WORKING
CAPITAL
NET WORKING
CAPITAL

20. GROSS WORKING CAPITAL
GROSS WORKING CAPITAL
REPRESENTS THE AMOUNT OF
FUND INVESTED IN CURRENT
ASSET

21. NET WORKING CAPITAL
NET WORKING CAPITAL IS THE EXCESS
OF CURRENT ASSET OVER CURRENT
LIABILITIES
NET WORKING CAPITAL=CURRENT
ASSET-CURRENT LIABILITIES

22. OPERATING CYCLE CONCEPT
THE OPERATING CYCLE IS THE AVERAGE
PERIOD OF TIME REQUIRED FOR A BUSINESS TO
MAKE AN INITIAL OUTLAYOF CASH TO
PRODUCE GOODS,SELL THE GOODS AND
RECEIVE CASH FROM CUTOMERS IN EXCHANGE
FOR THE GOODS

23. OPERATING CYCLE CONCEPT
OPERATING
CYCLE
CONCEPT
GROSS
OPERATING
CYCLE
NET
OPERATING
CYCLE

24. OPERATING CYCLE CONCEPT
CASH RECEIVED
FROM CUSTOMER &
PAID TO SUPPLIER
RAW MATERIAL
INTRODUCED
FINISHED GOODS
PRODUCED
SALE OF FINISHED
GOODS
RCP RMCP
FGCP WIPCP

25. OPERATING CYCLE CONCEPT
RMCP-RAW MATERIAL CONVERSION PERIOD
WIPCP-WORK IN PROGRESS CONVERSION PERIOD
FGCP-FINISHED GOODS CONVERSION PERIOD
RCP-RECEIVABLES CONVERSION PERIOD
GROSS OPERATING CYCLE=RMCP+WIPCP+FGCP+RCP
NET OPERATING CYCLE=GROSS OPERATING CYCLE-
PAYABLE DEFERRAL PERIOD

26. DETERMINENTS OF WORKING CAPITAL
1. SIZE OF THE BUSINESS
2. NATURE OF THE BUSINESS
3. STORAGE PERIOD
4. CREDIT PERIOD
5. SEASONAL REQUIREMENT
6. POTENTIAL GROWTH OR EXPANSION OF BUSINESS
7. CHANGES IN PRICE LEVEL
8. DIVIDEND POLICY
9. WORKING CAPITAL CYCLE
10. OPERATING EFFICIENCY
11. OTHER FACTORS