earnings retention ratio

Earnings retention ratio

Plowback rate.

Earnings Retention Ratio

The percentage of a publicly-traded company's post-tax earnings that are not paid in dividends. Most earnings retained are re-invested into the company's operations. Tracking year-on-year earnings retention ratios is important to fundamental analysis to investigate whether a company is increasing or decreasing its rate of re-investment. The earnings retentions ratio is calculated thusly:

Earnings retention ratio = (Net income - dividends) / Net income

For example, a company with a net income of $10 million that pays out $3.5 million in dividends has an earnings retention ratio of (10 million - 3.5 million) / 10 million = 65%. It is also called simply the retention ratio.

earnings retention ratio

See retention rate.

单词	earnings retention ratio
释义	earnings retention ratio Earnings retention ratio Plowback rate. Earnings Retention Ratio The percentage of a publicly-traded company's post-tax earnings that are not paid in dividends. Most earnings retained are re-invested into the company's operations. Tracking year-on-year earnings retention ratios is important to fundamental analysis to investigate whether a company is increasing or decreasing its rate of re-investment. The earnings retentions ratio is calculated thusly: Earnings retention ratio = (Net income - dividends) / Net income For example, a company with a net income of $10 million that pays out $3.5 million in dividends has an earnings retention ratio of (10 million - 3.5 million) / 10 million = 65%. It is also called simply the retention ratio. earnings retention ratio See retention rate.
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