Retained Earnings Calculator

Calculate the portion of a company's profit kept over time after paying taxes and dividends to shareholders.

Input Parameters

Calculation Results

Calculation Formula

Retained Earnings = Beginning Retained Earnings + Net Income - Dividends

Where:
- Beginning Retained Earnings: Cumulative net income retained by the company over time
- Net Income: Total earnings of the company for a period after all expenses
- Dividends: Payments made to shareholders from the company's profits

Retained Earnings Calculator Calculator Usage Guide

Learn how to use the Retained Earnings Calculator calculator and its working principles

How to Use This Calculator

  1. Enter your beginning retained earnings (cumulative net income retained by the company over time).
  2. Enter your net income for the period (total earnings after all expenses).
  3. Enter any dividends paid to shareholders during the period.
  4. Click the "Calculate" button to compute your retained earnings.
  5. The result will show how much profit has been retained by the company after distributing dividends.

Understanding Retained Earnings

Retained earnings represent the portion of a company's profit that is not distributed to shareholders as dividends but instead kept by the company to be reinvested in its core business or to pay off debt. This is an important metric for assessing a company's financial health and growth potential.

Example Calculation

Suppose a company has:

  • Beginning Retained Earnings: $500,000
  • Net Income: $200,000
  • Dividends Paid: $50,000

The calculation would be:

Retained Earnings = $500,000 + $200,000 - $50,000 = $650,000