Enter the net income and dividends into the calculator to determine the retention ratio of an asset or business.

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## Retention Ratio Formula

The following equation can be used to calculate the retention ratio.

RR = (NI-D)/NI

- Where RR is the retention ratio
- NI is the net income
- D is the dividends

## Retention Ratio Definition

A retention ratio is defined as the total ratio of income retained by an investment after dividends are paid out to investors.

## Retention Ratio Example

How to calculate a retention ratio?

**First, determine the net income.**Calculate the net income generated by the investment.

**Next, determine the dividends.**Calculate the dividends paid out by the investment.

**Finally, calculate the retention ratio.**Using the equation above, calculate the retention ratio.

## FAQ

**What is a retention ratio?**

A retention ratio is a ratio or measure of how much income is retained after dividends are paid out to investors.

**What is a dividend?**

A dividend is a regularly occurring payment made to investors of a company.