Plowback Ratio in Finance: Definition & Formula


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If Company A has a dividend payout ratio of 20%, what is its plowback ratio?

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1. If Company B retained 30% of their earnings last year and paid a dividend with the remaining earnings, what was their plowback ratio?

2. Which factor is NOT indicative of a company with a high plowback ratio?

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About This Quiz & Worksheet

The quiz/worksheet combo is available to help you check your understanding of the plowback ratio in finance. The meaning of this formula and how to use it are topics you need to know for the quiz.

Quiz & Worksheet Goals

Take the quiz to check your comprehension of:

  • Factors that are indicative of a company with a low plowback ratio
  • Some factors that are indicative of companies with a high plowback ratio
  • Calculating the plowback ratio

Skills Practiced

  • Knowledge application - use your knowledge to answer questions about calculating the plowback ratio for different examples
  • Reading comprehension - ensure that you draw the most important information from the lesson on the plowback ratio
  • Interpreting information - verify that you can read information about factors that are indicative of a low plowback ratio

Additional Learning

Plowback Ratio in Finance: Definition & Formula is a lesson you can access anytime to explore the following topics:

  • Another name for the plowback ratio
  • Plowback ratio examples
  • Factors that affect this ratio