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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 noun from the Cambridge Business English Dictionary © Cambridge University Press)

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