retention ratio definition

retention ratio

Percentage of the earnings of a firm that are not paid out to stockholders (shareholders) as dividends but are either reinvested in the firm or are kept as reserve for specified purposes (such as to pay off a debt or purchase a capital asset). Formula: Retained earnings in an accounting period x 100 ÷ earnings in that accounting period.

retention ratio is in the Accounting & Auditing, Banking, Commerce & Finance and Investing subjects.

retention ratio appears in the definition of the following term: retention

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