Financial Statement Analysis

Financial Statement Analysis

ANALYSIS PROFITABILITY

( DIVIDEND PAYOUT RATIO METHOD )

 

SRI AYU

361 10 030

3B-D3

A.    ANALYSIS PROFITABILITY

a.      DEFINITION

Profitability analysis is an analysis of the operating performance of a company. On this analysis, the company measures the company's ability to generate income either by using existing assets as well by using their own capital.

b.      THE BENEFIT FOR COMPANY

Every company is most concerned with its profitability. One of the most frequently used tools of financial ratio analysis is profitability ratios which are used to determine the company's bottom line and its return to its investors.

B.     DIVIDEND PAYOUT RATIO

The dividend payout ratio is the amount of dividends paid to stockholders relative to the amount of total net income of a company. The amount that is not paid out in dividends to stockholders is held by the company for growth. The amount that is kept by the company is called retained earnings.

C.    DIVIDEND PAYOUT RATIO FORMULA

Dividen Payout Ratio =        Dividends per share

                                                   earning per share

Dividen Payout Ratio =         Dividends

                                               Net Income

D.    How to calculate the dividend payout ratio of PT Sepatu Bata

                                                    

Dividend payout ratio            =     dividend per share

                                                         earning per share

                                                 =      1230

                                                         4217

            =      0,29 or 29 %

 

Dividend payout ratio            =     Dividends

                                                                   Net Income

                                                             =    Rp 15.990.000

                                                                   Rp 54.823.054

                                                              =    0,29 or 29 %

E.     Interpretation

So, the ratio of  income that paid out to the shareholder as dividend is 0,29 or 29 %.

In the other words, the net income of the company haved , can results 0,29 or 29 % dividen ratio.

F.     Conclusion

Dividend pay out ratio refers to the fraction of Net income (Income after tax) paid out to shareholders as Dividends. Investors with preference to high incomes normally go for companies with higher dividend ratio.

This ratio formula is used by some when considering whether to invest in a profitable company that pays out dividends versus a profitable company that has high growth potential.