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  25. What Is the Retention Ratio — How Much Money Has a Company Built Up Inside the Business? 3-Line Summary The retention ratio shows how much profit a company has kept inside the business instead of sending it out. It helps investors think about internal financial strength, crisis resistance, and future investment capacity. Still, a high retention ratio is not automatically good, and a low one is not automatically bad, so the structure behind the number matters. Recommended Keywords retention ratio, retained earnings, financial stability, stock basics, company analysis, shareholder equity, capital stock, financial statements, balance sheet strength, investing terms Table of Contents Why the retention ratio matters The easiest way to understand the retention ratio How the retention ratio is calculated Simple examples with numbers Does a high retention ratio always mean a good company? Does a low retention ratio always mean a bad company? The relationship between the retention rat...