Total sales = $200,000. Net income = $20,000. Dividend payout ratio = 30%. Operating cash flow = $40,000. Price per share = $100. Shares outstanding = 1,000.
<h3>What is
Dividend payout ratio?</h3>
Investors can get a sense of a company's dividend payout ratio by comparing it to the amount of money it maintains on hand for growth, debt repayment, and cash reserves.
Using the data available at the bottom of a company's income statement, this ratio can be determined quickly. The dividend yield, on the other hand, contrasts the dividend payment with the stock price of the company at the time of the comparison.
How much is paid out in dividends can be determined using the dividend payout ratio.
This computation enables businesses to determine how much cash is available (after dividends are paid) for debt repayment or reinvested.
The income statement of a corporation is used to compute this ratio.
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