DPS definition: abbreviation for dividend per share. The Company announced a dividend of $5/share, so you will receive $ 500. The beginning outstanding stock was 4000 and ending was 7000. What is DPS? Ex. it would vary greatly as well. However, another hypothetical company pays dividends monthly and has issued common shares periodically throughout the year. Here’s the formula for dividends per share (DPS) –. If the purpose is to analyze the company then, the second formula makes more sense. dividend discount model) due to its predictability. Honey Bee Company has paid annual dividends of $20,000. To simplify let’s take a hypothetical example for weighted average shares: Here, Shares outstanding are given weight based on the time they were outstanding during the period. Consequently, the section is charged with the responsibility for preparing and maintaining records, procedures, and organizational plans designed to provide reasonable assurance that: Contact@FinanceFormulas.net. Using the DPS formula, we get – DPS Formula = Annual Dividends / Number of Shares = $20,000 / 5500 = $3.64 per share. We need to know the dividend yield and other financial measures to ensure whether the company has enough growth potential or not. You can easily calculate the ratio in the template provided. To continue reading this question and the solution, sign up ... it's free! Dividends per share (DPS) is an important financial ratio in understanding the financial health and long-term growth prospects of a company. DPS: Dependable Printer Support: DPS: Document Production Services: DPS: Direct Plant Shipments: DPS: Douglas Process Specification (superseded by Boeing Process Specification) DPS: Dorset Professional Services, Inc: DPS: Datamaxx Professional Services, Inc: DPS: Database Publishing Systems Ltd: DPS: Dennison and Pacific Suburban Railway Company: DPS eval(ez_write_tag([[728,90],'efinancemanagement_com-banner-1','ezslot_4',120,'0','0']));Using DPS as a metric provides more comparability and reliable interpretation rather than the absolute dividend. Get your ticket. The use of the weighted average method is true for those companies that pay dividend for the existing shares in January and issue new shares in December. Finance DPS abbreviation meaning defined here. weighted average is also used with the earnings per share formula. It should be noted that this kind of comparison should be done between similar companies. Before an investor ever decides to invest; she needs to look at all the measures and find out a holistic view of the company’s financial affairs. Possible DP meaning as an acronym, abbreviation, shorthand or slang term vary from category to category. The denominator of the dividends per share formula generally uses the annual weighted average of outstanding shares. Questions To Ask Customers For Engagement, Advertisement Policy Of Banglsdesh & Punishment, What Are The Ways Selectivity Can Be Achieved Thro. There may be more than one meaning of DPS, so check it out all meanings of DPS one by one. Dividends per share is also used in other financial formulas, including dividend yield and dividend payout ratio. DPS is a very simple ratio to understand. and similar publications. Save my name, email, and website in this browser for the next time I comment. First, we will go for simple average to find out the average outstanding shares. of  common shares outstanding, DIVIDEND PER SHARE CALCULATION WITH EXAMPLE, ANALYSIS/INTERPRETATION OF DIVIDEND PER SHARE, ADVANTAGES OF USING DIVIDEND PER SHARE RATIO, Click to share on WhatsApp (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Pinterest (Opens in new window), Click to share on Skype (Opens in new window), Click to share on Tumblr (Opens in new window), Click to share on Telegram (Opens in new window), Click to share on Reddit (Opens in new window), Click to share on Pocket (Opens in new window), Click to email this to a friend (Opens in new window). Just like, we find earning per share (EPS) because per share data provides a better idea of company’s profitability.