Bank strategy: dividends on shares and financial management

The main goal of the management of any company is to increase the value of the business and its value in the eyes of the owners. Therefore, it is not surprising that financial relationships with owners exert a very significant influence on the development strategy of any enterprise. Decisions in this area, for example, how to accrue dividends, are conducted in the context of the dividend policy being pursued. This policy is an important part of the overall strategy of the bank, aimed at optimizing the proportions between parts of net profit to increase the share capital. The main types of dividend policy are the payment of dividends on a residual principle, a policy of a fixed dividend, an "extra dividend" and a policy of constant growth of dividends. Dividends on shares are paid on the basis of the choice of dividend policy of the enterprise. This choice is due to a number of factors, the most important of which are the legal, political and socio-economic environment of the enterprise, its investment opportunities, the availability of alternative sources of financing, as well as the tax on dividends on shares.

There are three approaches to assessing the company's appropriate dividend policy. The theory of irrelevance, and the residual policy based on it, is applied by corporations with a high investment potential, when the insufficiency of dividend payments and the risk is compensated by a significant increase in the share price. The theory of preference is used by the most developed companies, whose assets are acquired by loyal investors - pension and investment funds, as well as various insurance companies. There is also another theory - the theory of differentiation of taxes, which contributes to the optimal distribution of profits on the consumed and reinvested parts in conditions of unequal taxation of corporate profits and dividend payments.

How to pay dividends on shares represents an important task of financial management. That is why the task of optimizing financial flows is actualized. Assess the wealth of owners can be based on the profit that this or that activity of the company brings. At the same time, profit is the expected financial result. Real receipts and payments do not coincide in time (and sometimes in value) with incomes and expenses. Consequently, the net financial flow and profit will not coincide. But it is the pure financial flow that shows how much the owner of the company really will have.

To make the right decisions in the management of financial flows, it is necessary to understand the differences between income and costs, on the one hand, and cash flows on the other. Incomes and expenses reflect the process of profit formation, from which, in fact, dividends on shares are paid. Cash flows are real receipts and payments, necessarily accompanied by the movement of finance or their equivalents. It is expedient to carry out the analysis of flows by 2 methods: direct and indirect. The first provides an opportunity to identify the most significant for the company sources and cash, which helps to focus on the company's most important financial flows. The indirect method reveals the reasons for the discrepancy between financial results and net cash flow in order to increase it; Determine the optimal structure of cash flows.

Make a cash flow forecast is appropriate in the form of a budget, which reflects the entire scheme of money flow. Its purpose is to ensure long-term liquidity and solvency of the company, to minimize the costs of attracting resources, to maximize the income from available funds. It is advisable to schedule the cash flows in the form of a payment calendar.

Ways of financing a temporary shortage of cash: working capital optimization, bank lending, factoring, money market instruments issuance. Ways of investing: making advance payments, canceling discounts for customers, early repayment of short-term loans, a deposit certificate, a deposit , state short-term. In these cases, many enterprises do not pay dividends on shares either.