The dividend payout ratio, calculated by dividing dividends per share by earnings per share (EPS), measures the proportion of earnings distributed as dividends to shareholders.
- A higher ratio indicates a higher return of profits to shareholders, while a lower ratio suggests reinvestment of earnings for growth.
-This ratio is important for investors to assess the company's dividend policy and potential for income.
- It also provides insights into the company's financial strategy and long-term growth prospects.