Retained earnings: Learn how to find

Learn how to find and calculate retained earnings , the cumulative profits or net earnings a company has produced over time after accounting for any dividends paid to shareholders. Retained earnings offer insights into a company's financial health and future prospects, and can be used for expansion, investment, debt reduction, or share repurchasing. Retained earnings , often found under the equity section of a balance sheet, represent the cumulative portion of a company’s net income that has been reinvested in the business rather than paid out as dividends to shareholders. Over time, this amount reflects the company’s profitability, management’s strategic decisions, and its financial health. Let’s dive into what retained earnings are, why they matter, and some practical examples to illustrate the concept. The statement of retained earnings is a key financial report showing how much profit a company reinvests. This guide explains the purpose of the retained earnings statement, its formula (Beginning RE + Net Income – Dividends), and how to prepare one with clear examples and analysis. Retained Earnings is a critical financial metric that reveals the cumulative net earnings a company has retained over time, rather than distributed as dividends to shareholders. This amount ...