#STOCK PRO RATA HOW TO#

Multiply this number by the number of days in the shorter pay term. When calculating the amount due for a partial insurance premium payment, perform the following steps:ĭetermine the total amount for the insurance premium for a year.ĭivide the total annual premium by the number of days in a year (365). This means that your prorated rent or lease payment for the month of January would be $161.

You would then multiply this number by 10 to get $161. This calculation will give you the prorated rent or lease payment based on how many days of the month you are required to pay your lease or rent for.Įxample: If you are paying for 10 days in the month of January, and the total monthly rent or lease payment is $500, you would divide $500 by the number of days in January (31) to get $16.13. Multiply the prorated per-day payment by the number of days the prorated rent is being paid for. The following are steps to take when determining a prorated lease or rent payment:įind out the total cost of the rent or lease per month.ĭetermine the prorated rent or lease rate per day.

#STOCK PRO RATA HOW TO#

Related: How To Calculate Dividend Yield (Definition and Step by Step Example) Pro rata lease or rent payments This calculation will give you the per-share dividend amount.Įxample: If a company is paying out $500,000 in cash dividends for its shares and it has 100,000 outstanding shares in the market, the pro rata dividend payout would be 500,000 divided by 100,000, which equals 500. When calculating dividend payments using pro rata, following these steps:ĭetermine the total dividend amount available to be paid out to shareholders.ĭivide this dividend amount by the total number of outstanding shares needed to be paid out to shareholders. The following are ways to calculate pro rata based on the situation in which it's being used: Pro rata dividend payments Planning a project budget that incorporates expenses for different departments and needs Setting revenue quotas for individual geographical locations Paying out dividends or cash payments to shareholders of an organizationĭiscerning the total amount of an insurance policy premium to be paid that was implemented in a partial insurance termĪllocating the right portion of a yearly interest rate within a time frame that is less than one yearĬalculating a part-time employee's salary in relation to what they would make if they were a full-time employeeĭividing expenses among a certain number of people for a set period of timeĪdjusting loan payments to be paid monthly rather than annually A few of the most common instances that a person or company may use pro rata include when: There are several situations in which pro rata may be used. Related: What Is Resource Management? A Guide to Resource Allocation and Planning When to use pro rata In this instance, pro rata is used to determine the percentage a part-time worker would make if they worked full-time.

Businesses may also use pro rata when calculating the salary of a part-time employee. Businesses use pro rata to ensure these financial figures are accurately analyzed and distributed in a fair manner. In business, pro rata is often calculated in regards to expenses, revenue allocation, capital and other financial scenarios that involve giving or receiving money from one individual or entity.

Pro rata is often used when an exact value isn't easily discernible in and of itself but can be given a proportion value in comparison to something else. While pro rata doesn't necessarily signal that all parts are equal, it does mean that it gives each part a value that is proportionate to something else.

Pro rata translates to 'in proportion' and means that whatever is being referred to as prorate is being distributed in equivalent rations. Pro rata, sometimes referred to as “prorated,” is a Latin word used to describe the allocation or assignment of value in a proportionate manner.

Stock pro rata