what is a payout 
payouts refer to the expected returns or disbursements from investments or annuities a payout may be expressed as a lump sum or on a periodic basis and as either a percentage of the investment s cost or in a real dollar amount a payout can also refer to the period in which an investment or project is expected to recoup its initial capital investment and become minimally profitable in this case it is short for time to payout term to payout or payout period in terms of financial securities such as annuities and dividends payouts refer to the amounts received at given points in time for example in the case of an annuity payouts are made to the annuitant at regular intervals such as monthly or quarterly payout ratio as a measure of distributionthere are two main ways that companies can distribute earnings to investors dividends and share buybacks with dividends payouts are made by corporations to their investors and can be in the form of cash dividends or stock dividends the payout ratio is the percentage rate of income the company pays out to investors in the form of distributions some payout ratios include both dividends and share buybacks while others only include dividends for example a payout ratio of 20 means the company pays out 20 of company distributions if company a has 10 million in net income it pays out 2 million to shareholders growth companies and newly formed companies tend to have low payout ratios investors in these companies rely more on share price appreciation for returns than dividends and share buybacks the payout ratio is calculated with the following formula the payout ratio can also include share repurchases in which case the formula is as follows the cash amount paid out to dividends can be found on the cash flow statement in the section about cash flows from financing dividends and stock repurchases represent an outflow of cash and are classified as outflows on the cash flow statement capital budgeting payoutsthe term payout may also refer to the capital budgeting tool used to determine the number of years it takes for a project to pay for itself projects that take longer are considered less desirable than projects with a shorter period the payout or payback period is calculated by dividing the initial investment by the cash inflow per period if company a spends 1 million on a project that saves 500 000 a year for the next five years the payout period is calculated by dividing 1 million by 500 000 the answer is two which means the project will pay for itself in two years annuity payoutsan annuity has two phases an accumulation phase and a payout phase during the accumulation phase the annuitant deposits funds into the account so they can grow taxed deferred until they are withdrawn during the payout phase which is often during retirement the annuitant receives payments from the insurance company as income for the retiree these payments are payouts an annuity payout can come in one of two forms as a lump sum payment or as a payment that arrives at regular intervals such as monthly quarterly or annually with a life annuity the payout phase will last until the annuitant dies providing income with periodic payments for the rest of the annuitant s life with a joint and survivor annuity the payouts continue for the duration of the beneficiary s life typically the surviving spouse this is not limited to annuities however if you have a pension you may also have the option to choose between a single life payout and a joint and survivor or joint life payout typically joint life payouts are smaller than single life payouts to account for the number of payments that will last the duration of the life of the beneficiary 