The Relationship Between Profitability, Cash Flow and Dividend Payout: A Study of Listed Companies in Kenya

Abstract

This study examined the relationship that exists between profitability, cash flow and dividend payout. The research study adopted a descriptive research design. To achieve these objective thirty financial statements of listed companies was analyzed. The research also advanced the work of previous scholars and academicians. Based on this research the results showed that there was a positive relationship between dividend payout and profitability. The results also showed a positive relationship between dividend payout and cash flow. The study recommended that firm managers should plan on the proportion of profits that should be retained versus the portion that should be distributed as dividends to stockholders. Managers are also rated on financial performance hence the findings of this study would be of great benefit to them and would also act as a guide to setting reliable corporate dividend policies.