### Retention Ratio (Plowback Ratio)

Investor institutional Retail Speculator. GE gives dividends every year to it shareholders. The numerator of this equation calculates the earnings that were retained during the period since all the profits that are not distributed as dividends during the period are kept by the company. From Wikipedia, the free encyclopedia. This article needs additional citations for verification.

## Accounting Topics

The effective rate is calculated in the following way, where r is the effective annual rate, i the nominal rate, and n the number of compounding periods per year for example, 12 for monthly compounding:. The effective interest rate is a special case of the internal rate of return. If the monthly interest rate j is known and remains constant throughout the year, the effective annual rate can be calculated as follows:.

The annual percentage rate APR is calculated in the following way, where i is the interest rate for the period and n is the number of periods. In accountancy the term effective interest rate is used to describe the rate used to calculate interest expense or income under the effective interest method.

This is not the same as the effective annual rate, and is usually stated as an APR rate. From Wikipedia, the free encyclopedia. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. August Learn how and when to remove this template message.

Government spending Final consumption expenditure Operations Redistribution. Multiply the rate of decrease by to convert from a decimal to a percentage. In this example, multiply 0. Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics.

How to Calculate Percentage Reduction. How to Calculate Percent of Return. How to Calculate Percentage Decrease on a Calculator. Finding the Percent of Increase or Decrease.

You could simplify the formula by rewriting it as earnings retained during the period divided by net income. Since companies need to retain some portion of their profits in order to continue to operate and grow, investors value this ratio to help predict where companies will be in the future. Apple, for instance, only started paying dividends in the early s.

Up until then, the company retained all of its profits every year. This is true about most tech companies. They rarely give dividends because they want to reinvest and continue to grow at a steady rate.

The opposite is true about established companies like GE.