säilytyssuhde

Säilytyssuhde, or "retention ratio" in English, is a term used in Finnish business and finance to describe the proportion of profit that a company retains within the business rather than distributing it to shareholders as dividends. It is calculated by dividing the amount of retained earnings by the total net profit for a given period. A high säilytyssuhde indicates that a company is reinvesting a significant portion of its earnings back into its operations, which can fuel growth, fund research and development, or reduce debt. Conversely, a low säilytyssuhde suggests that a company is returning more profits to its owners, which can be attractive to investors seeking immediate income.

The decision on what proportion of profits to retain is a strategic one for management and the board of directors. Factors influencing this decision include the company's growth prospects, its capital needs, its debt levels, and the expectations of its shareholders. For young, rapidly growing companies, a high säilytyssuhde is often expected as they require capital to expand. Mature companies with stable earnings may opt for a lower säilytyssuhde, distributing more profits to shareholders. Understanding a company's säilytyssuhde can provide insights into its financial strategy and future growth potential.