# Retention Ratio Calculator

Retention ratio is also sometimes known as plowback ratio. It is the percentage of a company's earnings retained and reinvested by the company. Higher retention ratio suggests that the company may generate higher growth in future periods resulting in higher share price and potential capital gain. A lower retention ratio results in lower share price. Just input the required values and the given retention ratio calculator will automatically update you with the needed output.

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Retention ratio is also sometimes known as plowback ratio. It is the percentage of a company's earnings retained and reinvested by the company. Higher retention ratio suggests that the company may generate higher growth in future periods resulting in higher share price and potential capital gain. A lower retention ratio results in lower share price. Just input the required values and the given retention ratio calculator will automatically update you with the needed output.

Code to add this calci to your website  #### Formula:

r = ((n - d) / n) × 100 Where, r = Retention Ratio n = Net Income d = Dividends

### Example:

Let us consider that a company has a net income of Rs.1,50,000 and the dividends be Rs.50,000. Calculate the Retention Ratio.

#### Solution:

Retention Ratio r = ((n-d)/n)×100
= ((150000-50000)/150000)×100
= 66.66%