Measure how much of a company’s profit is paid out as dividends: payout ratio = total dividends ÷ net income × 100%. Includes a reverse solver, retention ratio & sustainable growth rate, and a two-company comparator.
| Payout ratio | Descriptive meaning |
|---|---|
| 0–30% | Conservative — most profit is retained |
| 30–60% | Balanced |
| 60–75% | High |
| 75–100% | Very high — watch sustainability |
| >100% | Dividends exceed this period’s profit (from cash/reserves) |
This table describes general patterns, not recommendations. Industry context, cash flow, and debt also matter.
Payout ratio = (total dividends ÷ net income) × 100% — equivalent to (DPS ÷ EPS) × 100%.Net income = total dividends ÷ (payout ratio ÷ 100) — algebraic inversion of the formula above.Total dividends = net income × (payout ratio ÷ 100).Retention ratio = 1 − payout ratio; SGR = ROE × retention ratio (a definitional identity, not a projection).The dividend payout ratio measures how much of a company’s net income is paid out as dividends. The formula: (total dividends ÷ net income) × 100%, equivalent to (DPS ÷ EPS) × 100%. Example: Rp50 billion in dividends from Rp200 billion in net income gives a 25% payout ratio — one quarter of earnings paid out, three quarters retained.
Payout ratio = dividends ÷ net income, measuring the company’s profit-distribution policy. Dividend yield = dividends ÷ share price, measuring the dividend return on the price you pay. Two companies can have the same payout ratio but different dividend yields because their share prices differ. To compute dividend yield and total return, use our capital gains & dividend yield calculator.
The payout ratio only measures the proportion of earnings paid as dividends — a descriptive single-period figure. The Dividend Discount Model uses dividends and their growth assumptions to estimate a stock’s fair value — that is a valuation method. Both use dividend data, but they answer different questions. See our Dividend Discount Model calculator for valuation.
Total dividends answer how many rupiah are paid out; the payout ratio answers what percent of earnings is paid out. Rp90 billion in dividends can mean a 20% payout if earnings are Rp450 billion, or 90% if earnings are Rp100 billion — very different sustainability contexts. This calculator focuses on the ratio, not the nominal amount.
Related: Dividend Calculator
Retention ratio = 1 − payout ratio, the portion of earnings the company retains. Sustainable growth rate = ROE × retention ratio, the growth rate that can mathematically be funded purely from retained earnings. This is an accounting definitional identity, not a projection or promise that the company will grow that fast.
Not necessarily — this figure is descriptive, not a verdict. Below 30% is common for growing companies retaining earnings for expansion; 30–60% is common for balanced mature companies; above 75% deserves scrutiny of sustainability since the room to retain earnings thins; above 100% means dividends exceed the current period’s earnings. Industry, cash flow, and debt also shape the context.
If net income is negative, the payout ratio is not economically meaningful and the calculator will show a warning. If the payout is above 100%, dividends are paid from cash or retained-earnings reserves — by definition that cannot be sustained from ongoing earnings forever.
No. All figures on this page are educational estimates for understanding financial ratios, not recommendations to buy, sell, or hold any stock. For investment decisions, consult a professional financial advisor.
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