Retained profits are shown on the balance sheet at the end of each accounting period as the total income from the prior year (including the current year's income), and fewer dividends paid to shareholders.
What is retained earnings with example?
The total profits left over after a corporation pays dividends to its shareholders are known as retained earnings. These funds might be put back into the company by, say, buying new machinery or paying off debt.
Is retained earnings the same as profit?
Your company's profits less any stock dividends or other distributions equal your retained earnings. Because you might have a positive net income but a negative cash flow after dividend payments, it can be a clearer measure of financial health than a company's profits.
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