Retained Earnings Calculator

Calculate retained earnings for financial analysis.

Retained Earnings Calculator - Financial Analysis Tool

Retained Earnings Calculator

Calculate retained earnings to analyze accumulated profits and business financial health

Retained Earnings Calculation

$

Retained earnings at start of period

$

Profit for the period

$

Total dividends distributed

$

Other income/losses (optional)

$
$

Calculation Results

Ending Retained Earnings

of

Beginning RE

Net Income

Dividends Paid

Other Items

Calculation Breakdown

Beginning Retained Earnings:
+ Net Income:
- Dividends Paid:
Ending Retained Earnings:

Retention Ratio

Earnings retained vs. total

Payout Ratio

Dividends vs. net income

Growth Rate

Period change

Formula & Information

Basic Formula

Ending Retained Earnings =

Beginning Retained Earnings

+ Net Income

- Dividends Paid

± Other Comprehensive Income

± Prior Period Adjustments

Key Ratios

Retention Ratio

= (Net Income - Dividends) / Net Income

Payout Ratio

= Dividends / Net Income

Growth Rate

= Change in RE / Beginning RE

Understanding Retained Earnings

What It Represents
  • • Accumulated profits kept in the business
  • • Earnings not distributed as dividends
  • • Source of internal financing
  • • Part of shareholders' equity
Uses in Analysis
  • • Assess dividend policy
  • • Evaluate reinvestment strategy
  • • Measure financial stability
  • • Calculate return on equity

Financial Analysis Tips

Positive Retained Earnings

Indicates profitable operations and conservative dividend policy. Shows potential for future growth and financial stability.

Negative Retained Earnings

May indicate accumulated losses or aggressive dividend payments. Requires careful analysis of underlying causes.

Trend Analysis

Track retained earnings over multiple periods to identify patterns in profitability and dividend policy.

Industry Comparison

Compare retention ratios with industry peers to assess relative dividend and reinvestment strategies.

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