Question

Why is proposed dividend no flow in cash flow statement?

Answer 1

Dear Student,
There will be two kinds of proposed dividend- Previous year's and current year's.
Now,
The previous year proposed dividend will be shown as outflow under financing activity considering the said proposed dividend is paid in the current year. And the current year's Proposed dividend will not be considered as outflow as the payment of the same happens only in the next year. Hence the proposed dividend of the current year will be added back to Net Profit to calculate the Net Profit before Tax and Extraordinary items only.
Regards