retention rate


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Retention rate

The percentage of present earnings held back or retained by a corporation, or one minus the dividend payout rate. Also called the retention ratio.

Earnings Retention Ratio

The percentage of a publicly-traded company's post-tax earnings that are not paid in dividends. Most earnings retained are re-invested into the company's operations. Tracking year-on-year earnings retention ratios is important to fundamental analysis to investigate whether a company is increasing or decreasing its rate of re-investment. The earnings retentions ratio is calculated thusly:

Earnings retention ratio = (Net income - dividends) / Net income

For example, a company with a net income of $10 million that pays out $3.5 million in dividends has an earnings retention ratio of (10 million - 3.5 million) / 10 million = 65%. It is also called simply the retention ratio.

retention rate

The proportion of net income that is not paid in dividends. A firm earning $80 million after taxes and paying dividends of $20 million has a retention rate of $60 million/$80 million, or 75%. A high retention rate makes it more likely a firm's income and dividends will grow in future years. Also called earnings retention ratio, plowback ratio.
References in periodicals archive ?
In a systematic review, false positive screening mammograms were not associated with retention rate in European countries, but were associated with an increased retention rate in the US.
We are proud of our 97% customer retention rate and are genuinely committed to taking care of our customers, which we believe is important to our business and also just the right thing to do, said Scott Scherr, CEO, president, and founder of Ultimate.
Conclusion: This study demonstrated that CBZ, OXC, and LEV are relatively effective in managing focal epilepsy as measured by time to first seizure, 12-month remission rate, and retention rate.
Data indicate when comparing the total direct premiums and net direct premiums that the retention rate of insurance companies rose 4 percent during the first quarter to 51 percent compared to 47 percent.
Data indicates that when comparing the total direct premiums and net direct premiums, the retention rate of insurance companies rose 4 per cent during the first quarter to 51 per cent as compared to 47 per cent.
At the state-based exchanges that could provide comparable data, the projected 2015 retention rate was just 69 percent.
Nonetheless, its biggest potential is in the retention rate.
Results from the new retention programs have been mixed in Iowa but more successful in nearby states like Wisconsin, where the student retention rate is 58 percent.
According to the Alabama Commission on Higher Education (2010), the overall state average retention rate for fall 2009 was 65% for all institutions and 54% for two-year colleges in, particular.
The 81% trainee retention rate reflected a solid year for the firm, which has reported high retention rates since 2007.
Calculating a client's lifetime value is as simple as taking the present value of a client's annual profitability and assessing it against the firm's retention rate.
Some investigators reported that a FS containing F releasing particles did not show a significant difference in retention rate compared with an unfilled conventional FS [Autio-Gold, 2002; Heifetz et al.