Retention Ratio Calculator
This is Retention Ratio Calculator. You can also use it through our mobile application.
The retention ratio is a helpful metric for analysts who want to make sure their company is retaining its customers. It measures how many customers are returning after a certain period of time (usually one year) and compares this number to the number of new customers acquired during that same period.
What is the retention ratio formula?
Retention Ratio = Retained Earnings / Net Income: This retention ratio formula requires locating the company’s retained earnings.
What does a high retention ratio mean?
A high retention level indicates that management believes there are uses for the cash internally that provide a rate of return higher than the cost of capital.
Why are retained earnings important?
Retained earnings can help a company increase its stock value, assure organizational sustainability, and provide budgets for important activities like research & development and expansion without increasing your debt.