Dividends are usually paid in cash or the issue of additional shares. Any dividend issue to the shareholders of Best Buy affects the retained earnings of the business. Dividend yield for BestBuy has been increasing and stands at 2.67% in November 2019. PE ratio is at 13.05. Cash dividends affect the shareholders' fund. Ordinarily, shareholders do not find any recordings for accounts containing dividends paid. Nevertheless, liability recording in shareholder's accounts is made after dividends have been declared even before actual payment is made. After the payout has been done, the effect will reduce the retained earnings of Best Buy Inc. in the time the financial statements are being released, a decrease in retained earnings would have been made, and dividends paid. Investors will not notice the entries in liability accounts in the shareholder's dividend payable accounts. Payout dividends is connected to the aspect of spending money, which may affect the cash flow of the business. Increasing payouts affect stock prices, which may lead in the reduction of the company's EPS.
Different stakeholders need to make investment decisions in the company. The computation of price per earnings ratio indicates the price investors will pay for every dollar of earnings. Debt to equity ratios will show stakeholders how the company is leveraged. The low figure is considered favorable. High values of dividend yields also signify better performance as well as increasing EPS. For instance, the EPS for Best Buy was $ 0.88 in 2018 and rose to $ 0,89 in 2019 (Café, 2019). This growth shows the assets are utilized well in generating revenues, and the equity fund is well maximized.
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References
Cafe, B. (2019). BestBuy Financial analysis- . BestBuy.com . Retrieved 16 November 2019, from http://www.BestBuy.com/
