Metric
Dividend Payout Ratio
Share of earnings paid to shareholders as dividends.
Formula
Dividends Paid ÷ Net Income
Definition
The payout ratio tells you what percentage of profits the company returns to shareholders versus reinvests.
Why it matters
A sustainable payout suggests a mature, cash-generative business. Ratios above 100% aren't covered by earnings and often can't last.
Building blocks
- Dividends Paid
- Cash distributed to shareholders over a period.
- Net Income
- Final profit left after all costs, interest, and taxes.
Educational information only, not investment advice. Turtleway helps you understand what a metric or concept means; it does not tell you what to buy or sell.