Retained Earnings

What are Retained Earnings?

Retained Earnings Definition: The retained earnings of a company or business refer to the cumulative net earnings, less the dividend payments, and related deductions.

This revenue or earnings are considered retained because this amount is what’s left over. The retained earnings increase when their additional profits are recorded, and they decrease when more dividends are paid to shareholders.

Whether to pay dividends to shareholders depends on a company’s management and the business’s financial performance.

A statement of retained earnings is often included with other periodic financial statements to indicate the overall financial status of a corporation.

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