Retained earnings: Are accumulated profits that

Retained earnings are accumulated profits that companies reinvest instead of paying as dividends , helping finance growth, improve stability, and reduce debt, though decisions may impact shareholder satisfaction and financial ratios like ROE and payout ratios. Find out everything about retained earnings including the formula, features, and factors that affect it. Plus, learn how to calculate it below. Read on! Learn what retained earnings are, how they are calculated, and how they affect the balance sheet and income statement. See examples, video explanation, and financial modeling applications. Beginning Retained Earnings : This is the retained earnings balance from the end of the previous period. Net Income or Loss: This is the profit (or loss) the company made during the current period.