Undivided Profit


DEFINITION of 'Undivided Profit'

Gains from current and past years that have not been transferred to a surplus account or distributed as dividends to shareholders. Undivided profit refers to corporate earnings that have accumulated over a period of time.

BREAKING DOWN 'Undivided Profit'

Current earnings may be credited to the undivided profits account and will eventually either be distributed to shareholder in the form of dividends or will be held within the company in the form of retained earnings. Dividend distributions signal strong financial strength within the company while retained earnings can be used to further future growth; the desired strategy depends on the amount of profit generated and the potential for value maximizing projects.

  1. Balance Sheet

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  2. Surplus

    The amount of an asset or resource that exceeds the portion that ...
  3. Dividend

    A distribution of a portion of a company's earnings, decided ...
  4. Shareholder

    Any person, company or other institution that owns at least one ...
  5. Retained Earnings

    Retained earnings is the percentage of net earnings not paid ...
  6. Accountant

    A professional who performs accounting functions such as audits ...
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  2. Do working capital funds expire?

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  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

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  5. How can working capital affect a company's finances?

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