Retained earnings (or accumulated loss) represents the total net profit or net loss a company has earned since it was founded, after dividends have been paid to shareholders. This figure is shown on the company’s balance sheet and reflects how much of the business’s profits have been reinvested back into the company over time, versus distributed to shareholders. If the company has experienced more losses than gains, this line item will show as an accumulated loss. If you’re exploring what are retained earnings or how retained earnings affect a balance sheet, it’s a key measure of a company’s long-term financial performance and stability.
Building Blocks: Financial Statements: Balance Sheet
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