Profit retention rate

Profit retention rate is also called retained profit rate.

Refers to the ratio of the company's after-tax profit after deducting the cash dividend payable to the after-tax profit. Profit retention rate = (after-tax profit-dividend payable)/after-tax profit × 100%.

The profit retention rate indicates how much of the company's after-tax profit is used for dividend distribution and how much is used for surplus retention and expansion. The higher the profit retention rate, it shows that the company pays more attention to the stamina of development and will not affect the development of the company because of excessive dividends. The profit retention rate is too low, or it shows that the company's production and operation are not smooth, and it has to use more profits to make up for losses, or it has too much dividends and limited development potential.

The reinvestment rate, also known as the internal growth rate, indicates that the company reinvests its surplus income to support its growth ability. The higher the reinvestment rate, the stronger the company's ability to expand its operations, and vice versa.

Profit retention rate = ([[after-tax profit]]-dividend payable)/after-tax profit × 100%. Profit retention rate is also called retained profit rate. Refers to the ratio of the company's after-tax profit after deducting the cash dividend payable to the after-tax profit.

Retained income refers to the internal accumulation extracted by enterprises from the profits realized over the years, which comes from the net profit realized by the production and operation activities of enterprises, including the surplus reserve and undistributed profits of enterprises, in which the surplus reserve is the accumulated surplus with a specific purpose and the undistributed profit is the accumulated surplus without a specific purpose.