The retention ratio measures the percentage of a company’s earnings that are reinvested rather than distributed as dividends. Investors use the retention ratio to assess how much profit a ...

The retention ratio is the exact opposite of the payout ratio. If a company pays out 50% of its earnings in dividends and keeps 50% for corporate use, it has a retention ratio of 50% and a payout ...

If a company has a ratio between 0.90 and 1, it means that its earnings are not able to pay off its debt and that its earnings are less than its interest expenses.

The retention ratio measures the percentage of a company’s earnings that are reinvested rather than distributed as dividends. Investors use the retention ratio to assess how much profit a ...