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Retained Earnings

 

Retained Earnings

 

Retained Earnings is the number of profits or losses a business has earned after it settled out to investors.  The formula for retained earnings is: Beginning retained earnings + Profits/losses - Cash/Stock Dividends = Retained Earnings

 

Why Retained Earnings important?

 

The company’s retained earnings do not necessarily mean the reflection or the current cash equivalent of business though the amount of retained earnings is used by companies to invest and acquire assets with this it adds value to the business and makes its ability to produce profits higher.



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