Retained earnings, also known as retention ratio or retained surplus, is a business term referring to the net earnings retained by a company to reinvest in its business or to pay debt.
Retained earnings, also known as retention ratio or retained surplus, is a business term referring to the net earnings retained by a company to reinvest in its business or to pay debt.
Retained earnings are recorded under shareholders’ equity on a company’s balance sheet, and are calculated by subtracting dividends from net income plus previous retained earnings.
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