Decision Making During Corporation Share Split

Most corporations rely, depend and thrust subtle resolutions to their corporate financial statements without actually taking the burden to reflect on certain factors such as dividends when their company stocks (shares) splits.

Splits do not occur in most cases on regulated timing / scheduled but base on their corporation, company or incorporation’s performance / merger procedures such as convergence, absorption, mergence or combination of multiple corporations to restructure overheads by the owner(s), reducing the number of officers hence busting the overall performance by identifying newly improve methodology to accumulate profitability per investors / owners of either or companies or shares.

Resolutions generally indicated by Financial Adaptive Finite Quantitative (FAFQ) platforms may not indicate the In-House Financial Statements for such corporations.

  1. Many as often, the most debated, disputed column value amongst Economists, savvy IT specialists with an incline to actuate / accrued [of sums of money or benefits) be received by someone in regular or increasing amounts over time] logics or Financial Mathematicians have always been the DEBT amount.

The DEBT amount on total number of available shares multiplied by the price per share (P/S) should NOT be regarded when considering performance of any corporation. Neither should the company’s bottom line performance be evaluated by considering the outstanding shares.

When considering the total number of shares including outstanding shares, the figure associated with or display on the “DEBT” column should be regarded as positive. In this case, trailing issues regarding the distribution of profitability’s should not be apparent or questionable to its holders.

During corporations, companies, or incorporated stock (shares) splits, the dividend is usually the inverse (vice versa) of the split ratio. In case the value is very high compare to the value per share, an additional amount of share could be distributed per holders / employees.

Let’s go through a simple example for instance GOOGLE, Inc with a share price of $2260.00 and had to split 20:1 which took place July 15, 2022; the resulting table is a typical example on how the dividends would be reflected and further distributed.

EQUITYCURRENT SHARE PRICESPLIT RATIORESULTING SHARE PRICE
GOOGL$2260.0020:1$113.00
FOR DIVIDEND
 CURRENT DIVIDEND VALUERATIO        (VICE VERSA)RESULTING DIVIDEND VALUE
IF$2.0020:1$0.10

The shareability, distribution and usability of the resulting dividend value would eventually drop down the final reporting value. At that instance, the board of directors is deemed to decide what value to agree on as dividend which should not be ≤ $2.00/20 at a minimum.

It’s always interesting when such minimal arithmetic consumes our precious time, while socializing over the latest pastries, traveling from unnecessary distance just to decide when to publicize such crucial information as pertinent to stockholders as well as employees.