Analysis on Capital Structure, Dividend Policy & Working Capital Requirements of

The dividend policy has grown over the years. This may be so that the company projects itself as a less risky share and thus also gaining investors faith. The investors buy its shares and thus increase its demand. This helps to gives positive signals to the investors signalling that the company is stable and can generate earnings steadily. This hypothesis is gains standing from the dividend hypothesis theory.

When a company decides to pay dividends, it has to be careful on how much it will be given to the shareholders. It is of no use to pay shareholders dividends

This paper will show the situational analysis of commonwealth bank, it also analysed the organisational structure and its strategies. Because every business needs to take some action that will help them keep a good position in the market, but before taken any action they have to do some research the find to cause of problem in order to identify the resolution. The results and useful information during this analysis will help the organisation to choose suitable strategies, develop that management strategies and improving the service operation, which is going to help them achieve their objectives. At the beginning it will be presented brief history of commonwealth bank and following by their operational service, problems

What’ s more, although investors like the dividend, it is just period solution to attack people and it may not be able to keep the company growing in a long run.

If the cash is kept in the firm, there are chances that these capitals will be reinvested and bring the Linear Technology potential benefit from tax shield and interest earnings. Thus, a part of the opportunity costs of paying dividend will be a deduction of tax by the nature of debt

The payments of interest are a fixed liability of the company so the financial manager have to decide what profit is left over for the company (Pujari, S 2015). The surplus profit is distributed to equity shareholders as dividend or it is kept aside as retained earnings. Financial managers have to decide how much to distributed as dividend and how much is needed to keep aside as retained earnings. They take in consideration the growth plans and investment opportunities (Pujari, S 2015). There are also affecting factors for dividend decision which the financial manager needs to analyze the factors before dividing the net earnings between dividend and retained earnings. Earnings is an affecting factor because dividends are paid out of the current and previous year’s earning (Pujari, S 2015). When a company experiences more earnings than the company has a high rate of dividends whereas if the experience low earnings than the dividends are low as well. Stability of earnings is another affecting factor because when a company has stable earnings they will give a higher rate of dividends, but if a company has lower earnings the dividends will be lower as well (Pujari, S 2015). Dividend decisions also has cash flow position factors where companies will declare a high rate of dividends only when the company has surplus funds. In cases where the company has a cash shortage they will also have low dividends (Pujari, S

As shown in the excel worksheet, over the last 10 years the dividend offered to the stockholders has been steadily rising. In the year 2015 is big banks are predicted to have a soft economic market, uncertainty and concern due to the new laws and an increased charge for bad debts.

Dividend policy refers to the payout policy that a company follows in determining the size and pattern of distributions to shareholders over time. Distribution of cash to shareholders by either payment of dividends and repurchase of shares has been a hotly debated topic amongst scholars. There exists many answers to an optimal dividend policy that satisfies both shareholders and management. With this the company generally faces two operational choices, the investment decision and the financing decision. Investment decisions concern the amount invested in the assets of the business and composition whereas the finance decision involves how the company will finance this. This can be achieved

If no dividend are paid, the company does not need financing required for the dividends. Hence the company’s financing needs

Analysis and notation of a companies’ actualized capital structure and payout policies serves as a temporal exposé; much can be reveal regarding how the company is managed and how such data bodes for the future. Therefore, a comprehensive appraisal of GMs current conventions pertaining to financing is capable of functioning as a test of overall forward virility or debility. Ratiocinations can be drawn based on the policies uncovered and insights gained.

Aditya Birla Money’s growing market share in retail cash equity broking, which rose from 1% a year ago to 1.5% and in commodity broking, which grew from0.28% to 0.44%.

The SCDCC bank has been maintaining a capital adequacy ratio above the prescribed level for the first 3 years. The capital adequacy ratio of SCDCC bank has been increased over the year and it was reached 9.99% in the year 2011-2012 but decreased in the year 2012-13. And in the previous year 2013-14 it is more decreased compared to other years because the bank has increase its borrowings from various sources. Increase in the risk assets is the main

Modigliani and Miller in their study that was published in the journal of business “Dividend policy, Growth and valuation of shares” stated that the dividend policy is not important for the value of the firm. M&M argued in this proposition that in

Working capital is the amount that a company’s current assets exceeds its current liabilities and is a measure of the company’s ability to pay its debts and liabilities if they were to all become due in the near future. Assets and liabilities are considered “current” if the asset is able to be converted into cash within one year and if the liability must be paid within one year (Bagul, 2014). Both Google (now Alphabet) and Microsoft hold working capital in sums that significantly exceed $50 million dollars, $61 million and $74 million respectively. These large sums are on account of the fact that both companies hold higher than normal levels of cash and investments (securities) when compared to most large corporations. While there is no set goal for how much working capital a company should hold, these numbers provide us with two clear conclusions. First, neither Google nor Microsoft currently have any risk of not being able to pay their debts on the short-term horizon because they have way more than enough current assets to cover even the most dramatic call of their debts. On the other hand, this high amount of working capital shows that the company could be investing its assets in a more efficient manner, rather than allowing them to sit unutilized.

 The delivery of new product capabilities to all customers, including those in rural areas  The unification of processes across the bank to realize operational efficiencies and improve customer service  Provision of a single customer view of all accounts  The ability to merge the affiliate banks into SBI  Support for all SBI existing products  Reduced customer wait times in branches  Reversal of the customer