Retained Earnings

Posted in Finance, Accounting and Economics Terms, Total Reads: 1208

Definition: Retained Earnings

Retained earnings is the money from the net income of the company that is not paid out as dividend to its shareholders but hold by the company in order to reinvest in its growth or to pay debt.

In the balance sheet it is recorded under the shareholder’s equity. It is calculated as


Retained Earnings = Beginning Retained Earnings + Net Income – dividends

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