Dividend Payout Ratio

Knowledge Center


Determining whether a company is generating a sufficient level of cash flow. Explanation of Dividend Payout Ratio.



Dividend Payout Ratio

The Dividend Payout Ratio is a model for Cash Flow Measurement, used by investors to determine whether a company is generating a sufficient level of cash flow to assure a continued stream of dividends to them. It is also a measurement of the amount of current net income, which is paid out in dividends, instead of the amount retained by the business.

Dividend Payout Ratio calculation

The Dividend Payout Ratio Formula (Cash Flow Measurement Formula) is relatively straightforward:

Divide total annual dividend payments by annual Net Income plus Noncash Expenses minus Noncash Sales.

Calculating the Dividend Payout Ratio during one year provides a very unreliable indication only. A better approach is to run a trend line on the ratio during several years to see if a general pattern of decline or increase emerges.

This ratio is useful in projecting the growth of company as well.


Retention Ratio

Its inverse, the Retention Ratio (the amount not paid out to shareholders in the form of dividends), can help to predict a company's growth.

Dividend Payout Ratio Special Interest Group

Special Interest Group (6 members)

Dividend Payout Ratio Forum  

Recent topics

  What are the Effects of Interim Dividend?
What are the effects of interim dividend declared on the company and on shareholders?...
  Dividend Payout Ratio Formula
The formula for Dividend Payout Ratio is helpful to understanding the concepts... Thank you...

Best Practices - Dividend Payout Ratio

Expert Tips - Dividend Payout Ratio

Resources - Dividend Payout Ratio

Financial Statement Analysis | Ratio Analysis

Ratio Analysis, Finanical Statement Analysis
This presentation provides insights in Financial statement and ratio analysis, and includes the foll...

Returns and Dividends

Dividend payout ratio
Study by Ian D. McManus a.o. concludes that the inclusion of Payout Ratio is an important adjunct to...

Dividend Payout Ratio Diagram

Dividend Management
Download and edit this 12manage PowerPoint graphic for limited personal, educational and business us...

Introduction to the Balance Sheet

Initial Understanding of a Balance Sheet, Financial Statement Analysis, Accounting
This video explains the main terms you need to read a balance sheet

Assets: things a comp...

News about Dividend Payout


News about Payout Ratio


Videos about Dividend Payout


Videos about Payout Ratio


Presentations about Dividend Payout


Presentations about Payout Ratio


Books about Dividend Payout


Books about Payout Ratio


More about Dividend Payout


More about Payout Ratio


Compare with Dividend Payout Ratio:  Cash Flow from Operations  |  Debt to Equity Ratio  |  CFROI  |  Cash Value Added  |  Cash Ratio  |  Economic Value Added

Return to Management Hub: Finance & Investing

More Management Methods, Models and Theory

Special Interest Group Leader

You here? Sign up for free


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2019 12manage - The Executive Fast Track. V15.0 - Last updated: 19-2-2019. All names ™ of their owners.