Limitations The statement of stockholders' equity has few limitations, simply because it is a summary financial statement used to explain equity changes. Because of this, the statement of stockholders' equity is not well suited for financial analysis. Most relevant equity information can be drawn specifically from the balance sheet stockholders' equity section and the income statement. One exception is a company's dividend payments. Dividend distributions are not reported in the balance sheet; they fall outside the income statement. However, cash dividend payments can be located within the financing section of the statement of cash flows. Chapter 3: SSE - Question 2 Identify the cash dividends per share. Determine the dividend payout percentage. A company's dividend payout percentage is computed by dividing dividend per common share by net income or earnings per common share. (Hint: If your company reported a net loss for the year the answer 154.5% lacks meaning.) (96 3,59409.78) Compute dividend yield. A company's dividend yield is computed by dividing dividend per common share by market price per common share. (Hint: Use the current per share price for 3,6% your selected company.) (p. 76) Is your company's dividend yield a reasonable return given current market conditions? Notes to the Financial Statements The accounting profession has adopted the full-disclosure principle, which emphasizes the reporting of any information that would influence the judgment of an informed reader. Althoug the balance sheet, statement of operations, and statement of cash flows provide significant economic substance, additional clarification and amplification provided in the notes can impro the understanding of the financial statement information. Companies that provide extensive not presentation are simply complying with generally accepted accounting principles (GAAP), and in certain cases, with regulations issued by the SEC. Notes are essentially the means of clarifyi