Finance & Money
Dividend Payout Ratio Calculator
Calculate per-share payout and earnings coverage, scale dividends to total shares, then compare the cash distribution with net income and free cash flow separately.
Dividend payout ratio from EPS-
Earnings coverage of dividend-
Estimated total dividends-
Net income after modeled dividends-
Dividends as share of free cash flow-
Free cash flow after dividends-
Decision view
Earnings and cash dividend support
Earnings and cash dividend supportAccounting earnings and free cash flow are evaluated through separate payout measures.
Exact scenario comparisonAnnual dividend per share changes while all other entered assumptions remain constant.
| Annual dividend per share | Dividend payout ratio from EPS | Earnings coverage of dividend | Estimated total dividends | Net income after modeled dividends | Dividends as share of free cash flow | Free cash flow after dividends |
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How to use Dividend Payout Ratio Calculator
- Use compatible annual periods.
- Remove or explain material one-time items.
- Review debt, capital expenditure, and preferred distributions alongside the ratios.
Calculator guide
Understanding Dividend Payout Ratio Calculator
Dividend payout should be reviewed against both accounting earnings and free cash flow because the two measures can tell different stories.
Calculation method
How the calculation works
Compare dividends with earnings per share and total free cash flow so accounting payout, coverage, and cash support remain separately visible. Divide dividend per share by earnings per share, multiply dividend by shares outstanding, and subtract total dividends from net income and free cash flow.
Dividend support
Separate accounting coverage from cash capacity
A sustainable payout generally needs support from both measures over time.
Worked situations
Practical examples
- EPS payout can look comfortable while cash payout is high.
- A coverage ratio below one indicates dividend above entered EPS.
- Negative retained income or cash after dividends signals a mismatch in the entered period.
Better inputs
Useful tips
- Use normalized earnings.
- Track the ratio across cycles.
- Compare with management's capital-allocation policy.
Before relying on the result
Limitations and common mistakes
- Definitions of earnings and free cash flow vary.
- Preferred dividends, buybacks, dilution, debt needs, acquisitions, and one-time items are excluded.
- The ratios do not predict a dividend cut.
Reference
Key terms
- EPS payout ratio
- Dividend per share divided by earnings per share.
- Coverage ratio
- Earnings per share divided by dividend per share.
- Cash payout ratio
- Total dividends divided by entered free cash flow.
- Retained income
- Entered net income after modeled common dividends.
Important note
Calculated from the entered values and stated financial terms. It is not a product quote, lending decision, tax filing, or investment recommendation.
Frequently asked questions
Which payout ratio is more important?
Both can be useful and should be reconciled.
Can payout exceed 100 percent?
Yes when dividends exceed entered earnings or cash flow.
Are buybacks included?
No.
Does a low ratio guarantee growth?
No.