Foundations of Financial Management
Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 18, Problem 3P
Summary Introduction

To calculate: The increase in the retained earnings of Swank Clothiers.

Introduction:

Payout Ratio:

The ratio that shows the total dividends paid by a company to its shareholders with respect to its net income is the payout ratio. It is computed by dividing the dividends paid by the company by its net income for the respective period.

Retained Earnings:

Retained earnings is the portion of profits earned by a business that is not disbursed as dividends to the shareholders by the company so that it can be used for future investments.

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