Payout Ratio

外汇网2021-06-19 13:34:11 101

The amount of earnings paid out in pidends to shareholders. Investors can use the payout ratio to determine what companies are doing with their earnings.

Calculated as:

Taobiz explains Payout Ratio

For example, a very low payout ratio indicates that a company is primarily focused on retaining its earnings rather than paying out pidends.

The payout ratio also indicates how well earnings support the pidend payments: the lower the ratio, the more secure the pidend because smaller pidends are easier to pay out than larger pidends.

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