- How to Calculate the Cumulative Dividends in Arrears
- How to Determine Cash Dividends Paid
- How to Calculate Annual Dividends to Preferred Stockholders
- How to Calculate Dividends in Arrears
- How to Get the Common Stock and Paid in Surplus on a Balance Sheet
- How to Calculate Cumulative Dividends Per Share
The amount of a company’s dividends payable on its balance sheet is the amount of dividends it owes its preferred and common stockholders. A company has an obligation to pay dividends to stockholders after it declares them. Preferred stockholders have priority in receiving their dividend payment before common stockholders. You can calculate the portion of a company’s dividends payable that will be paid to all common stockholders and the dividends payable per share to determine how much you will receive.
Find a public company’s most recent balance sheet in either its 10-Q quarterly reports or in its 10-K annual reports. You can download these reports online from the investor relations section of a company’s website or from the U.S. Securities and Exchange Commission’s online EDGAR database.
Identify the amount of dividends payable, listed in the “current liabilities” section of the balance sheet. This is the total amount of dividends the company owes to common and preferred stockholders. For example, if the company’s balance sheet shows $100,000 in dividends payable, it owes $100,000 in total dividends to common and preferred stockholders.
Identify the number of preferred shares outstanding, the par value per preferred share, the dividend rate of preferred stock and the number of common shares outstanding, listed in the “stockholders’ equity” section. The dividend rate is the percentage of par value the company pays as dividends on preferred stock. In this example, assume the company has 10,000 shares of preferred stock outstanding with a dividend rate of 5 percent and a par value of $10 per share. Assume it has 95,000 common shares outstanding.
Multiply together the number of preferred shares outstanding, the par value per share and the dividend rate to calculate the total dividends payable to preferred stockholders. In this example, calculate 10,000 times $10 times 5 percent to get $5,000 in dividends payable to preferred stockholders.
Subtract dividends payable to preferred stockholders from total dividends payable to calculate dividends payable to common stockholders. In this example, subtract $5,000 from $100,000 to get $95,000 in dividends payable to common stockholders.
Divide dividends payable to common stockholders by the number of common shares outstanding to calculate the dividends payable per common share. Continuing the example, divide $95,000 by 95,000 common shares outstanding to get $1 in dividends payable per share of common stock. This means you will receive $1 in dividends per share of common stock you own in the company.