Retained earnings

Retained Earnings is the percentage of net earnings not paid out as dividends, but retained from the company to be reinvested in the core business, as well as to pay debt. It truly is recorded under shareholders’ equity for the balance sheet. The formula calculates retained earnings by having net income in order to beginning retained revenue and subtracting virtually any dividends paid in order to shareholders:┬áRetained earnings (RE) = Beginning RE + Net Income – Dividends.