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Gross Distribution Formula:
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Gross Distribution (GD) represents the total amount of funds available for distribution before accounting for taxes and other deductions. It is calculated as the sum of Net Income (NI), Depreciation (Dep), and Interest (Int).
The calculator uses the Gross Distribution formula:
Where:
Explanation: This formula combines a company's profitability (NI) with non-cash expenses (Dep) and financing costs (Int) to determine the total funds available for distribution.
Details: Calculating Gross Distribution is essential for financial planning, determining dividend capacity, assessing cash flow availability, and making informed decisions about fund allocation and reinvestment strategies.
Tips: Enter all values in dollars. Input Net Income, Depreciation, and Interest as positive numbers. The calculator will sum these values to provide the Gross Distribution amount.
Q1: What's the difference between gross and net distribution?
A: Gross Distribution represents total available funds before deductions, while Net Distribution is the amount remaining after taxes and other expenses are subtracted.
Q2: Can Gross Distribution be negative?
A: While mathematically possible if components are negative, in practice Gross Distribution is typically a positive value representing available funds.
Q3: How often should Gross Distribution be calculated?
A: It's typically calculated quarterly or annually as part of financial reporting and planning cycles.
Q4: Does Gross Distribution include retained earnings?
A: No, Gross Distribution represents current period funds available, while retained earnings represent accumulated historical profits not distributed.
Q5: Is Gross Distribution the same as free cash flow?
A: No, free cash flow is a more comprehensive measure that also considers changes in working capital and capital expenditures.