Dividend Payout Ratio

The Dividend Payout Ratio computes the ratio of dividends and net income.

INSTRUCTIONS: Choose units and enter the following:

• (D) Total Dividends
• (NI) Net Income

Dividend Payout Ratio (DPR):  The calculator returns the ratio as a real number rounded to the nearest 10,000^th.  

The Math / Science

The dividend payout ratio is a fraction of the net income amount paid to stockholders of a company.   The formula for the dividend payout ratio is:

    DPR = D/NI

where:

• DPR = Dividend Payout Ratio
• D = Total Dividends
• NI = Net Income

This formula is helpful in deciding whether to invest in a profitable company that pays out dividends or a profitable company that has high growth potential.