A short instructional transcript excerpt in which Ndubuisi 'Andy' Egwim explains how a company's annual profit (£1 million in the example) is distributed among equal shareholders. He uses a medical/hospital business example and simple arithmetic to show that with 20 equal shares each shareholder would receive £50,000.
£1 million per year.
20 pieces (equal shares).
£50,000 per shareholder.
Does that make sense? Yes. So they have a share of that £1 million. Let's just say one. Let's just say £1 million. You make £1 million every year. I'm using hospital because I know that a lot of us here are medical. Well, everyone here is medical. So you understand what I'm saying. So that business is generating £1 million per year and you say at the end of the year I'm going to take the £1 million and distribute it to, you know, the shareholders, someone who is quick with mass. I'm sure you figured out it to be 50, 000 pounds each person, assuming they are equal shareholders. That. Do you get that so far? Yes. Excellent. Now, why we are making it all that simple is because when it goes up to shares, it's the same thing, it's just a bit more complex. Now, we're all equal partners in this business. We own this company together and the shares will go 20 pieces. So if you get £1 million, we have to share it. You get 50,000, I get 50,000.
