how is proposed dividend treated in
cash flow statement.
First you have to examine what proposed dividend actually is.
Is proposed dividend relates to current year or previous year?
While you calculate “Net Profit before tax and extra ordinary items” in the working notes ADD Current year’s proposed dividend to the Net Profit. So that effect will nullify from cash flow from operating activity.
When you come to Cash flow from Financing Activities , SUBTRACT Previous year’s Proposed Dividend because it will be paid in the current financial year. So its cashout flow from financial activity.
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