What are 'Retained Earnings'?

Retained earnings are the cumulative net earnings or profit of a firm after accounting for dividends — some people refer to them as the earnings surplus. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Retained Earnings A business generates earnings which can be positive (profits) or negative (losses). While managing losses is a different ball game altogether, profits (or the positive earnings) give a lot of room to the business owner(s) or the company management to utilize the surplus money earned. Breaking it Down: Companies record retained earnings under shareholders' equity on the balance sheet. The figure has now become a standard and is reported as... Read More » Related to "Retained Earnings" Which transactions affect retained earnings? Retained earnings is the cumulative total of earnings or net income that have yet to be paid to shareholders. Retained earnings can also be used reinvest back into the company or pay down debt. Read More » Are retained earnings listed on the income statement? Retained earnings are the cumulative net earnings or tprofit of a company after paying dividends and can be reported on the balance sheet and the statement of retained earnings. Read More » How Dividends Affect Stock Prices Find out how dividends affect the underlying stock's price, the role of market psychology, and how to predict price changes after dividend declarations. Read More » Related Definitions Capitalization Of Profits The capitalization of profits is the process of converting a company's retained earnings into capital stock. Read More » Stockholders' Equity Stockholders' equity is the remaining amount of assets available to shareholders after all liabilities have been paid. Read More » Net Loss A net loss occurs when expenses exceed income or total revenue produced for a given period of time. Read More » Dividend A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com If you wish to unsubscribe, please click here 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy