Dividend Policy Ratios and Firm Performance: Evidence from the Apparel Sector of USA

The dividend policy ratio is an influential matter on the firm performance in the context of the apparel sector. The shareholders benefit as a return for investing in the organization. Consequently, there is an impact on firm performance from dividend policy decisions. The basic aim of this study is to critically evaluate the relationship between dividend policy ratios and firm performance in the apparel sector of the USA. The research is conducted to determine the factors of dividend policy ratio and firm performance in identifying the relationship between two variables. Based on the results of the secondary method of analysis the research mainly focuses on improving the research aim through practical implications. The annual reports of four companies in the apparel sector of the USA are utilized from 2015-2019 as a source of data collection firms. Return on equity (RoE) was used as a dependent variable while dividend per share (DPS) and earnings per share (EPS) were modelled as independent variables. The data analysis shows a positive relationship between dividend policy ratio and firm performance. DPS and RoE have a significant relationship while EPS and ROE have an insignificant relationship. The combination of dividend policy ratio and firm performance results in investors making better decisions and the results of the study revealed that measuring ratios are the best strategy to improve the performance of the firm and attract more investors.