Finance Formulas / July 17, 2018 / Kenley Hopper
A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business (called retained earnings) and pay a proportion of the profit as a dividend to shareholders. Distribution to shareholders may be in cash (usually a deposit into a bank account) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or share repurchase.
Liabilities include all of the money a company owes. Similarly to assets, liabilities are divided into current liabilities, which include things like rent, tax, utilities, debts that are payable within a year, and dividends payable. "Long-term liabilities" generally refers to long-term debt the company has issued (bonds), but can include other non-immediate expenses such as pension obligations.
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