Retention Ratio Calculator

Calculate earnings retention ratio.

Net Income ($)

Dividends Paid ($)

Alternative Method:

Dividend Payout Ratio (%)

Retention Ratio

Retained Earnings

Payout Ratio

Enter values to calculate retention ratio

Retention Ratio = (Net Income - Dividends) ÷ Net Income

Retention Ratio = 1 - Dividend Payout Ratio

Net Income: Company's total profit after taxes

Dividends: Cash payments made to shareholders

Retained Earnings: Profits kept in the company for reinvestment

Low (0-30%): High dividend payments, limited reinvestment

Moderate (30-70%): Balanced approach to dividends and growth

High (70-100%): Focus on reinvestment and growth

Net Income: $1,000,000

Dividends Paid: $100,000

Retention Ratio: 90%

High retention for reinvestment

Net Income: $500,000

Dividends Paid: $300,000

Retention Ratio: 40%

Higher dividend payouts

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