Enter the total amount of dividends and the total amount of net income of a security. The calculator will evaluate and display the dividend payout ratio.

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## Dividend Payout Ratio Formula

The following formula can be used to calculate the dividend ratio of a stock or security.

DR = D / NI

- Where DR is the dividend payout ratio
- D is the total amount of dividends
- NI is the net income

## Dividend Payout Ratio Definition

A dividend payout ratio is a ratio of total dividends to net income of a security or business. It’s used to analyze how the total amount of dividends vary with changes in net income, since net income is often a leading factor for dividend payouts for the following year.

## Dividend Payout Ratio Example

How to calculate the dividend payout ratio?

**First, determine the total dividends.**Calculate the total value of the dividends earned.

**Next determine the net income.**Calculate the net income generated by the underlying business.

**Finally, calculate the dividend payout ratio.**Calculate the ratio using the formula above.

## FAQ

**What is a dividend payout ratio?**

A dividend payout ratio is a measure of the ratio of the dividend payout of a security to the total net income of the underlying company.