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Relationship between flow to shareholders and net income

Is there any relationship in between the flow to shareholders and the net income?

E

Expert

Verified

The relation among net income (BFO) and the obtainable flow to shareholders (CFac) in a year is the given here: CFac = BFO – ΔNOF – ΔAFN + ΔD + ΔEvc*, here ΔNOF is the enhance in working capital requirements, ¬AFN the enhance in net fixed assets, ΔD the enhance in financial debt and ΔEvc* the rise in Shareholders’ Equity that is not because of profits (i.e. reserves, conversion of convertibles).

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