Payout ratio

Payout ratio,

Definition of Payout ratio:

  1. Percentage of a firms earnings paid as dividends to stockholders (shareholders), it indicates how well the firms earnings support dividend payments. Lower this percentage, more secure the dividend payment. Also called dividend payout ratio. See also dividend cover. Formula: Dividend for a period x 100 ÷ Earnings for the same period.

Meaning of Payout ratio & Payout ratio Definition