Retention Rate Calculator
Calculate the retention rate (plowback ratio) to measure the percentage of earnings reinvested in the business.
How to Use the Retention Rate Calculator
- Enter net income.
- Enter dividends paid.
- Click Calculate.
- Review retention rate, payout rate, and retained earnings.
Use Cases
- •Sustainable growth rate input
- •Dividend policy evaluation
- •Reinvestment analysis
Formula
Retention Rate = (Net Income - Dividends) / Net Income × 100%
Frequently Asked Questions
What is the retention rate?
It is the proportion of net income that is retained in the business rather than distributed as dividends.
How does retention rate relate to payout?
Retention rate = 1 - Payout ratio. Together they must equal 100%.
Is this calculator free?
Yes, all calculators are completely free.