Presentation on

Divisible profit ,
Dividend and
Investigation
BY TANISHQ RASTOGI
B.COM 4th SEM.
 Meaning of Divisible profit
Divisible profit is the portion of a company's profit that can be
distributed to shareholders as dividend payments. The term
"divisible" indicates that the profit can be divided or distributed
among shareholders.
 Some concepts of divisible profit
• Profit Generation: Divisible profits can only be distributed if the company
has generated profits. Profit is calculated by deducting all expenses,
including operating costs, taxes, and interest payments, from the
company's total revenue.
• Legal Requirements and Restrictions: Before distributing dividends, a
company must ensure it complies with legal requirements and any
restrictions set forth in its governing documents, such as its articles of
incorporation or shareholders' agreements. These documents may outline
specific criteria or procedures for declaring and distributing dividends.
• Dividend Declaration: The company's board of directors typically
declares dividends after reviewing the financial performance and
determining the available divisible profits. The declaration may
specify the amount to be paid per share or a percentage of the
company's profits.
• Distribution to Shareholders: Once dividends are declared, they are
distributed to shareholders based on their ownership stakes in the
company. Shareholders receive dividends in proportion to their
shareholdings. For example, if a shareholder owns 10% of the
company's shares, they will receive 10% of the total dividends
declared.
 Meaning of Dividend
• A part of a company’s profits that is paid to the people
who own shares in it (shareholders) A dividend is a
distribution of profits by a corporation to its
shareholders, after which the stock exchange decreases
the price of the stock by the dividend to remove
volatility. When a corporation earns a profit or surplus, it
is able to pay a portion of the profit as a dividend to
shareholders.
• Dividends are a distribution of profits or earnings by a corporation to
its shareholders. Here's a comprehensive overview:
• Purpose: Dividends are one way for a corporation to reward its
shareholders for their investment in the company. They provide a
return on investment and can enhance shareholder value.
• Types:
• Cash Dividends: These are payments made to shareholders in the form of
cash.
• Stock Dividends: Instead of cash, shareholders receive additional shares of
stock.
• Property Dividends: Shareholders receive assets other than cash or stock,
such as real estate or inventory
• Payment: Dividends are usually paid on a per-share basis.
Shareholders receive dividends in proportion to their ownership
stake in the company. Payment dates are set by the board of
directors.
• Eligibility: Shareholders must meet certain criteria to receive
dividends. They must own shares before a specific date known as
the "record date." The shares must also be held in their name to be
eligible for dividends.
• Tax Treatment:
• Qualified Dividends: These are subject to preferential tax rates, similar to
long-term capital gains tax rates.
• Ordinary Dividends: These are taxed at the individual's ordinary income
tax rates.
 Meaning of Investigation
• Investigation in auditing refers to a detailed examination or
inquiry conducted by auditors to gather evidence and assess
the accuracy, completeness, and validity of financial
information. Auditors may conduct investigations for
various reasons, such as identifying fraud, errors, or
irregularities, as well as evaluating compliance with laws,
regulations, and internal policies.
 The investigation process typically involves the
following steps:
• Planning: Auditors plan the investigation, defining its scope, objectives, and
methodologies. They identify key areas to investigate and develop a plan to
gather relevant evidence effectively.
• Data Collection: Auditors collect data and documents relevant to the
investigation. This may include financial records, transactions, contracts,
correspondence, and other supporting documents.
• Analytical Procedures: Auditors analyze the collected data using various
analytical procedures to identify unusual trends, anomalies, or discrepancies
that may require further investigation.
• Testing: Auditors perform detailed testing procedures to verify the accuracy
and validity of financial information. This may involve sampling transactions,
examining supporting documentation, and performing substantive tests.
• Interviews and Inquiries: Auditors may interview relevant individuals within
the organization to gather additional information and clarify issues identified
during the investigation. This may include management, employees, and third
parties.
• Documentation: Auditors document their findings, including any identified
issues, discrepancies, or areas of concern. They maintain proper
documentation to support their conclusions and recommendations.
• Reporting: Auditors prepare a report summarizing the results of the
investigation. The report typically includes the scope of the investigation, the
procedures performed, the findings, conclusions, and recommendations for
corrective actions.
• Follow-Up: Auditors may follow up on any unresolved issues or
recommendations to ensure that appropriate corrective actions have been
taken by the organization.
Thank you for your
attention!