How to Calculate Dividends: Formula for Using Balance Sheet

You can find most companies' dividends without having to calculate them, but you'll be a better investor if you understand how to do it yourself.

By Jason Hall – Updated Feb 19, 2026 at 4:33 PM EST

Key Points

Calculate dividends by subtracting year-end retained earnings from start-year retained earnings, then net income.
Dividend payout ratio (DPR) is found by dividing total dividends by net income to assess dividend sustainability.
For dividends per share, divide total dividends by shares outstanding, checking for accuracy with the latest SEC filings.

Most companies report their dividends on a cash flow statement, in a separate accounting summary in their regular disclosures to investors, or in a stand-alone press release, but that's not always the case. If not, you can calculate dividends using a balance sheet and an income statement. You'll find these in a company's 10-K annual report.

Here is the formula for calculating dividends: Annual net income minus net change in retained earnings = dividends paid.

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Here is the DPR formula: Total dividends ÷ net income = dividend payout ratio. — Image source: The Motley Fool.

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Take total dividends divided by net income, and you will get DPR.

This is useful in measuring a company's ability to keep paying or even increasing a dividend. The higher the payout ratio, the harder it may be to maintain it; the lower, the better.

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Estimating dividends from the income statement alone

If a company has a consistent payout ratio, you can use the income statement to estimate what dividends it's likely to pay, without needing the balance sheet at all.

Find net income on the income statement (typically the last line, which is why it's called the "bottom line").
Divide net income by shares outstanding to get net income per share.
Multiply by the company's typical payout ratio (expressed as a decimal) to estimate the annual dividend per share. Divide by four for the quarterly figure.

Example: A company has historically paid out 40%–46% of net income as dividends. Using the midpoint, 43%, as the typical payout ratio: if the company earned $10 million with five million shares outstanding, net income per share is $2.00. Multiply by 0.43 and you get an estimated dividend of $0.86 per share.

This approach only works reliably when a company's payout ratio is consistent. It won't be useful for companies with irregular dividend histories.

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About the Author

Jason Hall is a contributing Motley Fool stock market analyst with more than a decade of experience writing about dividend stocks and long-term investing. He has been with the company since 2012 and previously spent over 10 years in technical sales in the printing and information services industry. Jason also founded and operated a small food manufacturing business.

TMFVelvetHammer

@thesmattering

The Motley Fool has a disclosure policy.

How to Calculate Dividends (With or Without a Balance Sheet)

You can find most companies' dividends without having to calculate them, but you'll be a better investor if you understand how to do it yourself.

Key Points

Estimating dividends from the income statement alone

Related investing topics

Best Blue Chip Stocks to Buy in 2026: Should You Invest?

5 Best Dividend-Paying Bank Stocks to Buy in 2026 and How to Invest in Them

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7 Best Monthly Dividend Stocks for February 2026

About the Author

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Premium Investing Services

Best Blue Chip Stocks to Buy in 2026: Should You Invest?

5 Best Dividend-Paying Bank Stocks to Buy in 2026 and How to Invest in Them

Dividend Kings of 2026

7 Best Monthly Dividend Stocks for February 2026

Using net income and retained earnings to calculate dividends paid

How to calculate dividends from the balance sheet and income statement

Calculating the dividend payout ratio

Estimating dividends from the income statement alone

Related investing topics

How to Calculate Dividends (With or Without a Balance Sheet)

You can find most companies' dividends without having to calculate them, but you'll be a better investor if you understand how to do it yourself.

Key Points

Estimating dividends from the income statement alone

Related investing topics

Best Blue Chip Stocks to Buy in 2026: Should You Invest?

5 Best Dividend-Paying Bank Stocks to Buy in 2026 and How to Invest in Them

Dividend Kings of 2026

7 Best Monthly Dividend Stocks for February 2026

About the Author

Our Guides

Premium Investing Services

Best Blue Chip Stocks to Buy in 2026: Should You Invest?

5 Best Dividend-Paying Bank Stocks to Buy in 2026 and How to Invest in Them

Dividend Kings of 2026

7 Best Monthly Dividend Stocks for February 2026

Using net income and retained earnings to calculate dividends paid

How to calculate dividends from the balance sheet and income statement

Calculating the dividend payout ratio

Estimating dividends from the income statement alone

Calculating dividends per share

Related investing topics