Shareholder Ratios

Question 1

What are shareholder ratios?

Answer 1

Ratios that help shareholders to assess if the organisation is a good investment. Including dividend per share and dividend yield(on ratio sheet)

Question 2

Dividend per share evaluation

Answer 2

Shows how much each share is worth as a dividend in pence to each shareholder.
The higher the figure the better the business has performed according to shareholders.
Can be an indication of improved profitability but if business decides to retain profits this will hit dividend payments.

Question 3

Dividend yield evaluation

Answer 3

Shows how much an organisation pays out in dividends each year compared to its share price.
Higher the percentage the better the organisation is performing.
Investors typically use this as an indication to decide how much of a return they will get from investment in buying shares.