Ratios: Payout Ratio definitions Flashcards
Ratios: Payout Ratio definitions
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Dividend Payout Ratio
Percentage of earnings distributed to shareholders as dividends, calculated by dividing cash dividends by net income and expressing the result as a percentage. Cash Dividends
Portion of company profits paid directly to shareholders, representing a return on their investment. Net Income
Total profit remaining after all expenses, taxes, and costs have been subtracted from total revenue. Shareholders
Individuals or entities owning shares in a company and eligible to receive dividends. Profitability Ratio
Financial metric assessing a company's ability to generate earnings relative to revenue, assets, or equity. Percentage
Numerical expression representing a proportion out of 100, commonly used to show ratios like payout ratios. Dividend Yield
Financial measure indicating how much a company pays out in dividends each year relative to its share price. Reinvestment
Strategy of using profits to fund company growth or operations instead of distributing them as dividends. Financial Health
Overall condition of a company’s finances, often assessed by examining profitability, liquidity, and stability. Stability
Consistency in a company’s financial practices, such as maintaining a steady payout ratio over time. Red Flag
Warning sign indicating potential financial trouble, such as a sudden decrease in dividend payouts. Earnings
Profits generated by a company, typically used as the basis for calculating dividends and payout ratios. Strategic Priorities
Company decisions regarding the allocation of profits, such as choosing between paying dividends or reinvesting.
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