PLAIN-LANGUAGE DEFINITION
The proportion of net income kept in the business rather than distributed to owners. Formula: (Net Income − Owner Distributions) ÷ Net Income. A higher retention ratio supports faster self-funded growth.
What to check
Test the assumptions and consider what happens if revenue or costs differ from your plan.
Where this connects to Impresa
You may encounter this concept when reviewing Growth Intelligence / Capital Planning. Start with the underlying inputs and check the applicable reporting period before interpreting the result.
Read the Growth Intelligence / Capital Planning guideA NOTE ON INTERPRETATION
NEXT DEFINITIONGrowth Gap ↗Definitions here explain the concept. Accounting treatments, formulas, and industry comparisons may vary. Use your own records and qualified advice for material decisions.