Retention Ratio Calculator

Rs
Rs
Finance

The Retention Ratio Calculator (plowback ratio) shows the share of net income a company keeps rather than pays out as dividends. Enter net income and dividends to get the retention and payout ratios.

Formula

Retention Ratio = (Net Income − Dividends) ÷ Net Income × 100
  • Retention ratio + payout ratio = 100%.
  • Higher retention funds growth; it drives the sustainable growth rate.

Rs 1,000,000 net income, Rs 300,000 dividends

Inputs
  • Net Income: 1000000 Rs
  • Dividends Paid: 300000 Rs

(1,000,000 − 300,000) ÷ 1,000,000 × 100 = 70% retained.

Frequently asked questions

How does retention ratio relate to growth?
Sustainable growth rate = retention ratio × return on equity, so retaining more earnings can fund faster growth.