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 | Words to Know | | |  | | Retained Earnings | Retained earnings (RE) is the amount of net income left over for the business after it has paid out dividends to its shareholders. A business generates earnings that can be positive (profits) or negative (losses).
Positive profits give a lot of room to the business owner(s) or the company management to utilize the surplus money earned. Often this profit is paid out to shareholders, but it can also be re-invested back into the company for growth purposes. The money not paid to shareholders counts as retained earnings. | | Read More » | | Related to "Retained Earnings" | | | | SPONSORED BY INVESCO | | The Complete Guide to ETFs | | ETFs are becoming increasingly popular and soaring to new heights among investors. Invesco's insights can help you determine if these investment vehicles are right for you. | | Learn 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 » | | | Income Statement | | An income statement is one of the three major financial statements that reports a company's financial performance over a specific accounting period. | | Read More » | | | Gross Sales | | Gross sales is a metric for the overall sales of a company, unadjusted for costs incurred in generating those sales, as well as things like discounts or returns from customers. It's calculated with a simple equation, where all sales invoices or related invoices are totaled. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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