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English definition of “retention ratio”

retention ratio

noun [S]
 
 
ACCOUNTING, FINANCE
the percentage of a company's profits that it decides to keep, rather than paying it to the shareholders as a dividend (= part of the profit that is paid to shareholders): The higher the retention ratio (i.e. the lower the dividend payout ratio), the higher the growth rate and vice versa.
(Definition of retention ratio from the Cambridge Business English Dictionary © Cambridge University Press)
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