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Plowback Ratio Calculator

Enter EPS and dividends per share to get the plowback and payout ratios.

Result

75.00%
25.00%

How it is calculated

Enter earnings per share EPS and dividends per share DPS in the same currency and for the same period. The tool computes the payout ratio payout = DPS / EPS and the plowback ratio plowback = 1 − payout, both shown as percentages with two decimals. The two always add up to 100%.

EPS must be above zero, since a company with zero or negative earnings has no meaningful payout ratio, and DPS cannot be negative; otherwise there is no result. If DPS is higher than EPS, the tool caps it at EPS, so it shows a payout of 100% and a plowback of 0% rather than a negative plowback. Dividends paid out of past reserves are therefore not reflected.

Worked example

A company earns 4.00 per share and pays 1.00 per share in dividends. Payout ratio: 1 / 4 = 0.25, or 25.00%. Plowback ratio: 1 − 0.25 = 0.75. The result is 75.00% plowback, meaning three quarters of earnings are kept in the business. If the dividend were 5.00, the tool would show 0.00% plowback and 100.00% payout.

Try this example →

Common mistakes

  • Mixing total and per-share figures. Use dividends per share with EPS, or total dividends with net income, but not one of each.
  • Mixing periods, such as annual dividends with quarterly EPS. The ratio would be roughly four times too high.
  • Entering the payout ratio itself as DPS. The tool asks for amounts per share in currency, not percentages.
  • Treating a high plowback as always good. It only says earnings are retained; whether the retained money earns a good return is a separate question.
  • Using a loss year. With EPS at zero or below the tool returns nothing, because a payout ratio cannot be judged against negative earnings.

About this calculator

This calculator computes the plowback (retention) ratio from per-share figures as 1 − (dividends per share ÷ EPS), and reports its complement, the payout ratio (dividends per share ÷ EPS), alongside it. A plowback ratio of 0.7 means 70% of each dollar earned is retained and reinvested in the business, while the remaining 30% is paid out to shareholders as dividends.

Growth investors watch this ratio because a high plowback rate signals a company reinvesting heavily in expansion rather than returning cash — appropriate for a young, high-growth company but worth questioning in a mature one. It's also a direct input to the sustainable growth rate formula (ROE × plowback ratio), which estimates how fast a company can grow without external financing.

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