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Abhishek ltd is manufacturing cotton clothes. …

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Abhishek ltd is manufacturing cotton clothes. It has been consistently earning good profits for many years. This year too, it has been able to generate enough profits. There is availability of enough cash in the company and good prospectus for growth in future. It is well manaaged organization and believesin equality,equal employment opportunity. It has many shareholders who prefer to receive a regular income from their investment.

It jas taken a loan of Rs.50lakhs frok ICICI Bank and is bound by certain restrictions on the payment of dividend according to the terms of the loan agreement

The above discussion about the company leads to various factors which decide how much of the profits should be retained and how much has to be distributed by the company.

Quoting the lines from the abve discussion, identify and explain any  four such factors.

  • 1 answers

Vidyashree Sairam 8 years, 9 months ago

'It has been consistently earning good profits for many years. - STABILITY OF EARNINGS

"There is availability of enough cash in the company and good prospectus for growth in future." - CASH FLOW POSITION

"It has many shareholders who prefer to receive a regular income from their investment." - SHAREHOLDERS PREFERENCE

"It has taken a loan of Rs.50lakhs frok ICICI Bank and is bound by certain restrictions on the payment of dividend according to the terms of the loan agreement" - CONTRACTUAL CONSTRAINTS

 

 

 

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