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| Jun 6th 2011, 10:43 Skip Oceanlane |
Question to Redux | |
| This post was originally from Alain Delpiaz in the Financial Reporting area: And it's 0.023 per share and what is the "june savings" line? |
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| Jul 6th 2011, 10:12 Redux Dengaku |
Re: Question to Redux | |
| hi sorry for the slow reply. I do that for bookkeeping and to keep dividends consistent since there are a mix of bad months and good months. If i gave away all my profit on a good month I wouldn't have anything to fall back on for a bad month. There's an imaginary 'credit/savings account' for dividends. Say it's june 1st, i'm looking to pay the dividend for the time period of April15-May15 and it was a bad month. Since i already have 15 days of profit for the next month (may15 to june 1st), I'll borrow money out of that and call it a "june advance", which is basically borrowing money from the "future" month (which by the time i pay the dividend is actually halfway over since there's a 15 day delay in posting the dividend). In the event there's a very good month i mark it down as "june savings" and pull cash out of the dividend and just throw it into june's budget. the reality is that the money isn't actually going anywhere, and keeping track of it really isn't important. it's me looking at the first 15 days of the upcoming month and the last month, and either borrowing money out of the current month to put toward last months dividend, or taking money out of the profit from last month and putting it toward the current month. At any instant my goal is to look at the 15 days past and try to guess about what i should have to do so both months will have even dividends. at any rate, any money pulled out of the dividend just goes into the next month as expense free income, which means either the next dividend will be bigger than it would have been or that the company needs it to get over a bad month and i'm trying to split the loss between two months. sorry i hope that answers the question, it makes sense in my head... say in june you earned 12 bottle caps. now it's july and you have only 3 bottle caps and the month is half over. put down that you made 10 bottle caps in june, put 2 bottle caps into july and now you're 5/10 and the month is halfway up, so both months are on pace for 10. OR say its july and in june you earned only 8 bottle caps, but so far in july you've got 7 and the month is half over. take 2 bottle caps and put it back in june and say you made 10 in june, and now you have 5/10 for july and the month is halfway over. the reason for this is because on months where there's an actual negative profit, i need cash to cover this and i can't debit money directly from shareholders as an anti dividend and i dont know how to budget profit as an "oh shit" fund, so i use the dividend as bumpering. |
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| Jul 6th 2011, 12:16 Skip Oceanlane |
Re: Question to Redux | |
| I shall forward a request to the Financial Report Review Committee about adding an "Oh Shit Fund" line :-) | ||
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