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Investments glossary

Retention Ratio Definition


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Quotes of the day:

Reality is the crutch for people who can\'t cope with drugs.

— Lily Tomlin

The retention ratio is the proportion of earnings kept back in the business as retained earnings. The retention ratio refers to the percentage of net income that is retained to grow the business, rather than being paid out as dividends. It is the opposite of the payout ratio, which measures the percentage of profit paid out to shareholders as dividends. The retention ratio is also called the plowback ratio.


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