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

## 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?

1. First, determine the net income.

Calculate the net income generated by the investment.

2. Next, determine the dividends.

Calculate the dividends paid out by the investment.

3. 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.