Retention Ratio Formula

The retention ratio, sometimes referred to as the plowback ratio, is the amount of retained earnings relative to earnings. Retention ratio is calculated by dividing earnings retained during the period by total earnings for the period. Earnings retained during a period equals total earnings for the period less total dividend payments during the period. The retention ratio formula is an important component utilized by the companies for their financial growth.


r = ((n - d) / n) × 100


r = Retention Ratio
n = Net Income
d = Dividends

Related Calculator:

Also, you can make use of the related calculator designed based on the retention ratio formula to verify your results achieved through manual calculations.

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