Retained Earnings

Browse all terms in Glossary

Definition

The net income that remains after paying dividends. It is reported on the balance sheet as the cumulative sum of each year's retained earnings over the life of the business. Retained earnings can be used to pay debt and future dividends, or can be reinvested into business activities.

Formula

Retained Earnings = Beginning Retained Earnings + Net Income - Dividends

Related Terms

Dividend, Earnings, Earnings per Share, Retained Earnings Growth

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