 Personal finance practice problem, using Excel dividend income estimation. Prepare to get financially fit by practicing personal finance. Here we are in our Excel worksheet. If you don't have access to it, that's okay because we'll basically build this from a blank sheet. But if you do have access, three tabs down below example, practice blank. Let's take a look at the example tab in essence being an answer key. Information's on the left. We're gonna use that information to estimate our quarterly dividends and our yearly dividends. The second tab, practice tab, is gonna have some pre-formatted worksheets so you can work through the practice problem with less Excel formatting. The blank tab is where we're gonna be adding the formatting as we go. If you don't have any of this worksheet, you could just open up a new worksheet. I would lay down a baseline formatting first and then put the information on the left-hand side doing that by selecting the triangle up top. I'm gonna right-click on the sheet, format the whole sheet. I usually start with currency and then the bracketed for the negative no dollar sign, no decimals. I'm not gonna hit okay because I already have that set up here. I'm just gonna close this out. Then enter your data on the left-hand side and then change the formatting of the cell. For example, adding decimals as needed. Make a skinny C column and we're good to go. So we'll start off with a quick calculation of the dividends, remembering that if we're owning stock, we're hoping to get a return on the stock, owning, having an ownership interest in a company, typically a publicly traded company. We're hoping that it will give us value in two ways. Typically, one, it can give us dividends giving some of the earnings back to us and two, it can increase in value and that will be reflected hopefully in the stock price as the market perceives that increase in value and then we'll have an increase in the stock price that we could sell the stock for. Here, we're looking at the dividends. Let's assume that we own 225 shares of the outstanding common stock and we'll assume that the quarterly dividend per share on a per share basis is gonna be 60 cents. So if that were the case, then we can try to figure out or estimate what the dividends we think we're gonna be getting from this investment will be. So we'll do a quick calculation here. I'm gonna make cell D a little bit wider, dragging it to the right. We're gonna call this the quarterly dividend check amount and I'm gonna then say enter. Let's make that black and white for our header. I'm gonna select those two cells, go to the home tab, font group. Let's make this black and white, black and white. I'm gonna make column D a little bit larger. So there we have it. And so all we're gonna do of course is take the shares that we have. So these are gonna be equal number of shares. The number of shares doesn't represent the total number of owners. It represents the number of ownership chunks that are out there. We can own multiple shares of the company. We're gonna say that we own 225 shares and we're gonna say that the quarterly dividend per share, let's just type it out. Quarterly dividend per share tab is gonna be equal to that 0.6 or 60 cents per share. That's at a one now because we have to format this thing. Let's go to the home tab, number group, add some decimals so we can see the 60 cents. I'm gonna make column D a little bit larger again. So there we have it. Now remember that the shares that are being or the dividends being given out are similar to kind of like draws if it was a partnership or sole proprietor. But we as the owner in a partnership typically have the capacity to determine how much we want in draws in a corporation then we can't have one stockholder getting paid different dividends than another. Therefore the dividend policy would need to be determined by the board of director and basically management. So we don't have the kind of control over that. So that's gonna be whatever it is. They might do it on a quarterly basis which is fairly standard but they can pick other terms of when they're gonna be offering the dividend as well. They typically wanna keep it fairly constant to having an upward increase or having some stable method for giving the dividends. So that means that we can typically predict with some degree of accuracy what we can expect dividends to be going forward. The dividends become more and more important if we're relying on the dividends for income such as in the years of retirement for example. Okay, so let's put an underline here home tab font group underline and we're gonna call this the quarterly dividend per share. So total let's just say total let's just call it total quarterly dividends for us, not per share. This is gonna be equal to the 225 times the 60. And so that means we got the 135. Let's add a couple of decimals just in case I think it's even, but add a couple of decimals so we can see the pennies. Okay, so let's make this blue and bordered. So I'm gonna select these items here and go to the home tab font group. Let's hit the bucket. I'm gonna make it that blue. If you don't have that blue, you can go to the more colors. You could use any blue you want but I typically go to the standard we don't have that blue. I don't want, but I typically go to the standard wheel here and pick that blue right there is my, that's what I typically do. And I'm kind of set in my ways. My ways have been set long ago and they don't change unless there's some dang good reason for them to be changing. I don't see one right here, any case. Now we've got the yearly dividend, yearly dividend, dividend. So obviously if we have four quarters that we're gonna get paid that much, we can basically say, okay, well there's four quarters in a year. Let's multiply times four and get the yearly dividend, shall we? Let's make this a font group bucket. Let's make this black and white. And we're gonna pick up the quarter or total quarterly dividends. I'll just equal the one above it. This is gonna be equal to the 135 and we're just gonna say quarters in a year. Quarters in a year, just like quarters in a dollar. There's four of them. That's what I'm talking about. So that means our yearly dividend that we can estimate how much we're gonna get yearly. We could say, well, we'll think in 135 times the four quarters and that gives us to 540. Let's put an underline, home tab underline. Let's add some decimals even though we don't need them just so it matches the decimalized number up top. Add in a few decimals in the number group. Let's make that blue and bordered. Why? That's what the cool Excel people do. Font group, they make it blue and bordered. And so we wanna be in alignment with those, the cool people. And so we'll put the borders around it. Let's do a quick spell check to make sure that we don't have any embarrassing misspellings that'll just destroy everything. Okay, so that's just a quick worksheet. These are great little worksheets or examples to kind of build our tables and practice basically our formatting. We'll get into some more complex calculations for the shares and the investments in future presentations.