17Mar 2021
Retained Earnings: Definition, Formula & Example
Reinvesting profits back into the company can help it grow and become more profitable over time. Many firms restate (or adjust) the balance of the retained earnings (RE) account as they record the effects of events that have their origins in earlier reporting periods. As such, some firms debited contingency losses to the appropriation and did are retained earnings an asset or liability not report them on the income statement. Retained earnings provide a much clearer picture of your business’ financial health than net income can. If a potential investor is looking at your books, they’re most likely interested...
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