Preferred stock dividends can typically be found in several key areas of a company’s financial statements, primarily on the income statement and the statement of cash flows.
On the income statement, the dividends on preferred stock are often included in the section that discusses earnings available to common shareholders. This section shows the net income after preferred dividends have been subtracted. It’s important to look for terms like “preferred dividends” or “dividends on preferred stock” as they may sometimes be noted separately under the net income line.
The statement of cash flows is another vital place to check. In the financing activities section, you might find outflows related to the payment of preferred stock dividends. This part of the statement provides insight into the actual cash paid out for those dividends during the reporting period.
Lastly, the notes to the financial statements often provide additional detail regarding the preferred stock, including the rate of dividends and any related policies. By reviewing these details, investors can get a clearer picture of how preferred stock dividends might impact the overall financial health of the company.