Meaning of “retention ratio” in the English Dictionary

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"retention ratio" in Business English

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retention rationoun [ S ]


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)