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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 691 |
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Retained earnings are the net income retained in the corporations. The time period is the same as that covered by the income statement. The introduction retained earnings amount is shown on the first line of the statement. Then net income is added and dividends are deducted to calculate the retained earnings at the end of the period...
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If a company has a net loss, it is deducted (rather than added) in the retained earnings statement. By observing the retained earnings statement, financial statement users are able to evaluate dividend payment practices. Quantities of investors seek companies that pay high dividends. Other investors look for companies that instead of paying dividends reinvest earnings to increase the company’s advancements...
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