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    jerome52's Avatar
    jerome52 Posts: 1, Reputation: 1
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    #1

    Nov 22, 2009, 04:04 PM
    Increase or decrease or none
    A cash dividend decelared and paid how does it effect working capital, current ratio, debt ratio, net income, stockholders equity.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Nov 22, 2009, 08:43 PM

    What accounts does declaring and paying a dividend affect? What is the entry for that? And what kind of accounts are those?

    Then sit down and write out all those equations and look at what figures would be affected by that entry. If you cannot figure out things like a bigger numerator would make a bigger answer, etc. then just plug some random numbers in, and work out the answer. Then make up a dividend amount and make the actual changes based on the accounts that would be affected, and work out the new answer and compare.
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