Abstract
This study presents a thorough analysis of dividend payout among the small and medium-sized firms (SMEs) operating in the manufacturing sector. The investigation primarily focuses on the cash flow and earnings methodologies. The present research aims to examine and assess the factors that impact dividend payout by using the Ordinary Least Squares (OLS) Regression methodology. The data used in this research has been obtained from the audited financial statements of 50 manufacturing firms that are publicly listed on the Pakistan Stock Exchange. The dataset has a duration of five years, namely spanning from 2018 to 2022. Based on the results of this study, it can be inferred that there exists a significant correlation between free cash flow and profits per share, and the dividend amounts of Pakistani firms listed on the Pakistan Stock Exchange. Additionally, the findings of the research indicate that there is a positive relationship between earnings per share and dividend per share, but this relationship is not statistically significant. Moreover, the research acknowledges the importance of cash flow and ownership structure in exerting an impact on dividend policy. Hence, this research contributes to the advancement of knowledge about the interplay of cash flow, earnings, and dividend payouts, and enriches the theoretical underpinnings of dividend policy within the domain of publicly listed manufacturing enterprises.