Overview
Payout ratio shows how much earnings are distributed as dividends.
Formula
Payout Ratio = Dividends / Net Income
How to Interpret
High Value
A high payout can support income but may limit reinvestment flexibility.
Low Value
A low payout can indicate reinvestment focus or limited dividend policy.
Where It Is Used
Using a rolling 4-period lens for Payout Ratio typically reduces single-period decision noise.