Residual Income (RI) Calculator

Calculate Residual Income (RI)





Formula

The formula to calculate the Residual Income (RI) is:

\[ RI = OI - (mrr \times OA) \]

Where:

What is Residual Income?

Residual income is defined as the total income received or leftover after all debts and obligations have been paid. In the context of the formula above, it explores the residual income of a company with respect to the performance of its capital investment.

Example Calculation

Let's consider an example:

Using the formula to calculate the Residual Income:

\[ RI = 200000 - (0.10 \times 1000000) = 200000 - 100000 = 100000 \text{ dollars} \]

This means that the residual income for this scenario is $100,000.