Retention Ratio indicates the percentage of a company's earnings that are not paid out in dividends but credited to retained earnings

Retained earnings

In accounting, retained earnings refers to the portion of net income which is retained by the corporation rather than distributed to its owners as dividends. Similarly, if the corporation takes a loss, then that loss is retained and called variously retained losses, accumulated losses or...

. It is the opposite of the dividend payout ratio, so that also called the retention rate.

Retention Ratio = 1 - Dividend Payout Ratio = Retained Earnings / Net Income

Retention ratio is also called plowback ratio.