The formula to calculate the Retention Ratio (RR) is:
\[ RR = \left(\frac{NI - D}{NI}\right) \]
Where:
The Retention Ratio is the proportion of earnings kept back in the business as retained earnings.
Net Income is a company's total earnings.
Dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Let's assume the following values:
Using the formula:
\[ RR = \left(\frac{NI - D}{NI}\right) \]
Evaluating:
\[ RR = \left(\frac{200000 - 25}{200000}\right) \]
The Retention Ratio is 0.999875.
| Net Income | Dividend | Retention Ratio |
|---|---|---|
| 150000% | 5000% | 0.966666666666667 |
| 150000% | 6000% | 0.960000000000000 |
| 150000% | 7000% | 0.953333333333333 |
| 150000% | 8000% | 0.946666666666667 |
| 150000% | 9000% | 0.940000000000000 |
| 150000% | 10000% | 0.933333333333333 |
| 150000% | 11000% | 0.926666666666667 |
| 150000% | 12000% | 0.920000000000000 |
| 150000% | 13000% | 0.913333333333333 |
| 150000% | 14000% | 0.906666666666667 |
| 150000% | 15000% | 0.900000000000000 |
| 160000% | 5000% | 0.968750000000000 |
| 160000% | 6000% | 0.962500000000000 |
| 160000% | 7000% | 0.956250000000000 |
| 160000% | 8000% | 0.950000000000000 |
| 160000% | 9000% | 0.943750000000000 |
| 160000% | 10000% | 0.937500000000000 |
| 160000% | 11000% | 0.931250000000000 |
| 160000% | 12000% | 0.925000000000000 |
| 160000% | 13000% | 0.918750000000000 |
| 160000% | 14000% | 0.912500000000000 |
| 160000% | 15000% | 0.906250000000000 |
| 170000% | 5000% | 0.970588235294118 |
| 170000% | 6000% | 0.964705882352941 |
| 170000% | 7000% | 0.958823529411765 |
| 170000% | 8000% | 0.952941176470588 |
| 170000% | 9000% | 0.947058823529412 |
| 170000% | 10000% | 0.941176470588235 |
| 170000% | 11000% | 0.935294117647059 |
| 170000% | 12000% | 0.929411764705882 |
| 170000% | 13000% | 0.923529411764706 |
| 170000% | 14000% | 0.917647058823529 |
| 170000% | 15000% | 0.911764705882353 |
| 180000% | 5000% | 0.972222222222222 |
| 180000% | 6000% | 0.966666666666667 |
| 180000% | 7000% | 0.961111111111111 |
| 180000% | 8000% | 0.955555555555556 |
| 180000% | 9000% | 0.950000000000000 |
| 180000% | 10000% | 0.944444444444444 |
| 180000% | 11000% | 0.938888888888889 |
| 180000% | 12000% | 0.933333333333333 |
| 180000% | 13000% | 0.927777777777778 |
| 180000% | 14000% | 0.922222222222222 |
| 180000% | 15000% | 0.916666666666667 |
| 190000% | 5000% | 0.973684210526316 |
| 190000% | 6000% | 0.968421052631579 |
| 190000% | 7000% | 0.963157894736842 |
| 190000% | 8000% | 0.957894736842105 |
| 190000% | 9000% | 0.952631578947368 |
| 190000% | 10000% | 0.947368421052632 |
| 190000% | 11000% | 0.942105263157895 |
| 190000% | 12000% | 0.936842105263158 |
| 190000% | 13000% | 0.931578947368421 |
| 190000% | 14000% | 0.926315789473684 |
| 190000% | 15000% | 0.921052631578947 |
| 200000% | 5000% | 0.975000000000000 |
| 200000% | 6000% | 0.970000000000000 |
| 200000% | 7000% | 0.965000000000000 |
| 200000% | 8000% | 0.960000000000000 |
| 200000% | 9000% | 0.955000000000000 |
| 200000% | 10000% | 0.950000000000000 |
| 200000% | 11000% | 0.945000000000000 |
| 200000% | 12000% | 0.940000000000000 |
| 200000% | 13000% | 0.935000000000000 |
| 200000% | 14000% | 0.930000000000000 |
| 200000% | 15000% | 0.925000000000000 |
| 210000% | 5000% | 0.976190476190476 |
| 210000% | 6000% | 0.971428571428571 |
| 210000% | 7000% | 0.966666666666667 |
| 210000% | 8000% | 0.961904761904762 |
| 210000% | 9000% | 0.957142857142857 |
| 210000% | 10000% | 0.952380952380952 |
| 210000% | 11000% | 0.947619047619048 |
| 210000% | 12000% | 0.942857142857143 |
| 210000% | 13000% | 0.938095238095238 |
| 210000% | 14000% | 0.933333333333333 |
| 210000% | 15000% | 0.928571428571429 |
| 220000% | 5000% | 0.977272727272727 |
| 220000% | 6000% | 0.972727272727273 |
| 220000% | 7000% | 0.968181818181818 |
| 220000% | 8000% | 0.963636363636364 |
| 220000% | 9000% | 0.959090909090909 |
| 220000% | 10000% | 0.954545454545455 |
| 220000% | 11000% | 0.950000000000000 |
| 220000% | 12000% | 0.945454545454545 |
| 220000% | 13000% | 0.940909090909091 |
| 220000% | 14000% | 0.936363636363636 |
| 220000% | 15000% | 0.931818181818182 |
| 230000% | 5000% | 0.978260869565217 |
| 230000% | 6000% | 0.973913043478261 |
| 230000% | 7000% | 0.969565217391304 |
| 230000% | 8000% | 0.965217391304348 |
| 230000% | 9000% | 0.960869565217391 |
| 230000% | 10000% | 0.956521739130435 |
| 230000% | 11000% | 0.952173913043478 |
| 230000% | 12000% | 0.947826086956522 |
| 230000% | 13000% | 0.943478260869565 |
| 230000% | 14000% | 0.939130434782609 |
| 230000% | 15000% | 0.934782608695652 |
| 240000% | 5000% | 0.979166666666667 |
| 240000% | 6000% | 0.975000000000000 |
| 240000% | 7000% | 0.970833333333333 |
| 240000% | 8000% | 0.966666666666667 |
| 240000% | 9000% | 0.962500000000000 |
| 240000% | 10000% | 0.958333333333333 |
| 240000% | 11000% | 0.954166666666667 |
| 240000% | 12000% | 0.950000000000000 |
| 240000% | 13000% | 0.945833333333333 |
| 240000% | 14000% | 0.941666666666667 |
| 240000% | 15000% | 0.937500000000000 |
| 250000% | 5000% | 0.980000000000000 |
| 250000% | 6000% | 0.976000000000000 |
| 250000% | 7000% | 0.972000000000000 |
| 250000% | 8000% | 0.968000000000000 |
| 250000% | 9000% | 0.964000000000000 |
| 250000% | 10000% | 0.960000000000000 |
| 250000% | 11000% | 0.956000000000000 |
| 250000% | 12000% | 0.952000000000000 |
| 250000% | 13000% | 0.948000000000000 |
| 250000% | 14000% | 0.944000000000000 |
| 250000% | 15000% | 0.940000000000000 |