Undistributed profit refers to the profit that the net profit realized by the enterprise remains in the enterprise after making up the losses, drawing surplus reserves and distributing profits to investors.
The balance of "undistributed profits" in the statements of listed companies reflects the accumulated undistributed profits or accumulated uncompensated losses of listed companies. Due to various reasons, such as balancing the return on investment in each fiscal year, making up the deficit with sufficient resources, leaving room, etc. The net profit realized by listed companies is not allowed to be completely completed, and the rest is reserved for distribution in future years. In this way, year after year, the balance is in the "undistributed profit" detailed account, reflecting the accumulated undistributed profit over the years. By the same token, the losses that were not made up in the previous year will be made up in the next year, and the losses in the next year will continue to roll over. The balance in the "undistributed profit" detailed account reflects the accumulated losses over the years and is recorded as negative.
Undistributed profit has two meanings: one is the profit reserved for future years; Second, there is no profit specified for a specific purpose. Compared with other parts of owners' equity, enterprises have greater autonomy in the use of undistributed profits. 1。 High undistributed profit means that enterprises have a lot of funds to keep, which means that enterprises need a lot of funds to circulate. If the amount of funds is small, it will cause losses, indicating that the financial situation is not good.
2。 Undistributed profit is calculated based on net profit, which is obtained by subtracting income from cost. Income, costs and expenses can all be related to monetary funds, so undistributed profits can be included in the company's assets.
3。 The undistributed profit per share is higher than the share price, which shows that the price-earnings ratio of this company is very low. If the company has development prospects, then the company may be acquired, but it is not necessary to buy the company immediately, because there are many indicators to consider besides the P/E ratio. As for the liquidation of assets you mentioned, it is unnecessary. Although you get more cash than you invested in the previous period, for a profitable enterprise, the income from liquidation is incomparable. Q:
When the company is profitable, the acquirer will not consider direct liquidation after the acquisition. The acquisition is to continue to make profits. Whoever completes the acquisition will be liquidated. Once the acquirer exceeds 50% of the equity ratio, it is the actual controller of the company. At this time, the actual controller is not considering whether I can return to my capital, but how many years the company can make a profit.