Retiming is a transformation that optimizes a sequential circuit by relocating the registers. When the circuit has an initial state, one must compute an equivalent initial state for the retimed circuit. In this paper we propose a new efficient retiming algorithm for performance optimization. The retiming determined by the algorithm is the best with respect to initial state computation. It is the easiest retiming for finding an equivalent initial state, and if logic modification is required, it incurs the minimum amount of modification.