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# 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.

%

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.

#### 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%