undistributed profits

(redirected from Unappropriated Retained Earnings)

Undistributed Profits

The amount of a publicly-traded company's post-tax earnings that are not paid in dividends. Most earnings retained are re-invested into the company's operations. Year-on-year tracking of the ratio of undistributed profits to dividends is important to fundamental analysis to investigate whether a company is increasing or decreasing its rate of re-investment. Undistributed profits form part of a company's equity, and are owned by shareholders. They are also called retained earnings, accumulated profits, undivided profits, and earned surplus.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

undistributed profits

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

undistributed profits

see RETAINED PROFIT.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

undistributed profits

see RETAINED PROFITS.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
In a disclosure to the Philippine Stock Exchange, "the board of directors of ICTSI approved and authorized the appropriation of a portion of ICTSI's unappropriated retained earnings in the amount of $25 million for additional working capital requirements of its continuing domestic and foreign expansion projects in 2018." In particular, the amount would be used to fund the construction of Berth 7 at the Manila International Container Terminal.
* May file Schedule M-1, Reconciliation of Income (Loss) and Analysis of Unappropriated Retained Earnings per Books, in place of Parts II and III of Schedule M-3;
Consolidated Statements of Income Years ended March 31, 2007 and 2006 ([yen] thousand) 2007 2006 Net sales 5,357,360 5,083,934 Cost of sales 4,245,697 4,354,997 Gross profit 1,111,662 728,936 Selling, general and administrative expenses 599,845 498,502 Operating income 511,817 230,434 Non-operating income 30,378 54,023 Non-operating expenses 18,088 11,656 Ordinary income 524,108 272,800 Extraordinary income -- 35,326 Extraordinary loss 43,558 120,363 Income before income taxes 480,549 187,764 Income taxes -- current 246,373 145,423 Income taxes -- deferred (27,686) (13,957) Net income 261,863 56,298 Unappropriated retained earnings brought -- 267,925 forward Unappropriated retained earnings for the term -- 324,224
These instructions also discuss Schedule M-2, "Analysis of Unappropriated Retained Earnings per Books," as follows:
Moreover, if Schedule L is eliminated, there would be no need for Schedule M-2 -- Analysis of Unappropriated Retained Earnings per Books to be included with the return.
Legal requirements for dividends vary from state to state, but most states require a positive balance in unappropriated retained earnings before a dividend may be declared.
In addition, Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return (used by corporations with assets under $10 million), and Schedule M-2, Analysis of Unappropriated Retained Earnings per Books per Return, previously included in Form 1120-F, are now separate forms.
GAAP requires the analysis of all retained earnings, not just unappropriated retained earnings. Therefore, this requirement is an additional unwarranted burden on taxpayers.
Before a corporation can declare a dividend, it must have not only the cash on hand, but sufficient unappropriated retained earnings as well.