Message Font: Serif | Sans-Serif
 
No. of Recommendations: 1
In this article -

http://www.fool.com/investing/dividends-income/2008/11/13/no...

Todd Wenning discusses the 'free cash flow payout ratio' as a means of determing if 'the company has an adequate cash cushion to maintain its dividend payments'.

Does anyone know how to calculate this ratio?
Print the post Back To Top
No. of Recommendations: 1
This doesn't address your question directly, but it's a start:

http://en.wikipedia.org/wiki/Free_cash_flow
Print the post Back To Top
No. of Recommendations: 2
Thanks for the reply - I finally decided to write to the author of the article and he replied with this - in case you are interested!

The equation for the FCF payout ratio is:

Total Dividends Paid / Levered Free Cash Flow

Levered Free Cash Flow, or Free Cash Flow to Equity = Net Income – Cap Ex + Depreciation – Change in net working capital – debt repaid + debt issued.
Print the post Back To Top
Advertisement