The dividends are classified according to the medium in which they are paid. Generally, dividend is paid in cash, but it may be in the form of shares (or stock), promissory notes, bonds or in the form of property. Thus dividend is payable in following forms:
(1) Cash Dividend.
(2) Stock Dividend (Bonus Shares).
(3) Optional Dividend.
(4) Scrip [...]
There is no definite answer to the question as to what should be the quantum of dividend every year. A number of factors affect it and the final figure of dividend is determined only after considering the following:
(1) Type of Business: The type of business carried on by the company influences the dividend policy. If [...]
The following practical problems have to be considered in making dividend decision:
(1) The Preference of shareholders - Dividend or Capital Gains.
(2) The Requirement of Company for Finance.
(3) Constraints on Paying Dividend.
(4) Stable or Irregular Dividend.
(5) Forms of Payment of Dividend.
(1) Preference of Shareholders: The shareholders are the real owners of the company and the management [...]
Dividend decision by any company is an important issue to be determined by the financial management. The important point is to determine how much earnings are to be distributed to shareholders and how much amount is to be retained in the firm, what is the dividend pay out ratio and what should be the retention [...]
For efficient inventory control, it is necessary that the various items of inventory must be continuously checked and compared with records maintained. This is done by Perpetual Inventory system. Perpetual inventory means a system of maintaining continuous stock records through bin cards and stores ledger. This implies continuous stock taking in which a certain number [...]
A modern system of inventory control which is economical too, is ABC system. In large companies, the inventory consists of thousands of items and a number of employees are employed to control them. Their salaries and other expenses run into lakhs of rupees. In order to affect economy in controlling such large inventory, a system [...]
(1) Determining EOQ
(2) Determining other Inventory Levels (e.g. Re-order Point)
(3) ABC System
(4) Perpetual inventory System
(A) Economic Order Quantity (EOQ): Economic order quantity is that quantity ordered at which the total ordering costs and inventory carrying costs will be the minimum. Alternatively, it is also known as “economic lot size’. If orders are placed for a [...]
Inventory Control Techniques
In order that the inventory costs are reduced to the minimum and yet the process of production and sales goes on uninterrupted, it is necessary to determine the following inventory levels:
(1) Re-order Point or Ordering Level
(2) Maximum Level
(3) Minimum Level
(4) Safety Level.
(A) Re-order Point represents the quantity level at which an order for [...]
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