How To Calculate Dividends In Stock Investment, Beginner Investors Must Know!

Illustration of calculating dividends (Between)

YOGYAKARTA Dividend is the company's profit or profit that is distributed to shareholders. Dividends are important things that investors must consider before buying shares. The reason is, through dividends, investors will receive part of the company's profit within a certain period of time. So, how to calculate dividends? Check out the full information below.

In the distribution of profits from companies, each investor will get its share according to the amount of shares owned. The more shares you buy, the bigger the dividend will be.

Before knowing how to calculate dividends, you need to know some important terms, such as Earning Per Share (EPS), Dividend Payout Ratio (DPR), and outstanding shares. This is very important so that you are not trapped in fraudulent stock investment.

Quoted from the IDX Channel page, Earning Per Share (EPS) or net profit per share is the distribution of net profit obtained by the company in a certain period. The distribution of EPS is carried out based on the amount of legality in circulation (outstanding shares).

Meanwhile, the Dividend Payout Ratio (DPR) or dividend payment ratio is the ratio that shows the percentage of each profit distributed to shareholders in cash.

What is meant by outstanding shares is the total number of shares of a company owned by investors.

Here's how to calculate dividends that investors must know so they don't get caught in fraudulent stock investments.

The first way to calculate dividends is to find total dividends from the DPR. Related to this, you can use the formula:

DPR = (Dividends distributed: Total outstanding shares) / (Total net profit: Total outstanding shares).

For example, in May 2023, company X recorded a net income of IDR 8 billion and plans to distribute dividends of IDR 3.2 billion to investors.

Currently, company X has 8,000,000 shares traded on the Indonesia Stock Exchange. According to this data, the value of the DPR company X in May 2023 can be calculated using the DPR = (Dividends distributed: Total outstanding shares) / (Total net profit : Total outstanding shares), so:

DPR = (3,2000,000,000: 800,000) / (8,000,000,000: 8,000,000) = 400 /1000 = 0.4 or 40 percent.

This means that only 40 percent of the company X's total net profit will be distributed to investors.

Dividend calculations can be performed with the following formulas:

Dividend: DPR's x net profit

If the net profit earned by company X is IDR 8 billion and the DPR value is 40 percent, then the dividend calculation is: IDR 8,000,000,000 x 40 percent = IDR 3,200,000,000

From the data above, dividends per share are circulated:

Thus, the dividend per share is circulated = IDR 3,200,000,000 / 8,000,000 shares = IDR 400 per share.

The dividends that will be received by each investor will be reduced by an income tax (PPh) of 10 percent.

For example, you are one of the company X investors whose dividend amount has been calculated above. Company X distributes dividends of IDR 400 per share. If you have 100 lots or 10,000 shares of the company X, then the dividend you will receive is:

Dividend before tax = 10,000 x IDR 400 = IDR 4,000,000

Dividend after tax = IDR 4,000,000 (IDR 4,000,000 x 10%) = IDR 3,600,000

Thus, the dividend that you will receive as an investor in company X with 100 lots or 10,000 shares ofhams is IDR 3,600,000

This is information about how to calculate dividends that every investor needs to know. To get other interesting news, keep reading VOI.ID.