Free · Equity investment calculators 📈

Retained Profit & Equity Growth Model Calculator

Multiply the earnings-retention fraction by return on equity.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Net income of 100, dividends of 40 and equity of 500 give a 60% retention ratio and 20% ROE. Their product is a modeled growth rate of 12%.

Retention = (net income − dividends) ÷ net income; modeled growth = retention × ROE

Worked example

Enter these known values and leave the other values blank.

Net income
100 USD
Dividends paid
40 USD
Total shareholder's equity
500 USD
Retention ratio
60 %
ROE
20 %
SGR
12 %

Assumptions and limitations

  • No. This is the retention-times-ROE version of the model, using the equity balance supplied. It assumes stable profitability, payout and financing relationships. Other growth formulas use different timing conventions, and actual funding needs depend on operations and investment.
  • Use consistent units, dates and financial definitions. The calculated result follows the stated assumptions and the amounts entered.

Common questions

Does this guarantee the company can grow at that rate?

No. This is the retention-times-ROE version of the model, using the equity balance supplied. It assumes stable profitability, payout and financing relationships. Other growth formulas use different timing conventions, and actual funding needs depend on operations and investment.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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