How to calculate Retained Earnings Formula
Non-cash items such as write-downs or impairments and stock-based compensation also affect the account. As an investor, one would like to know much more—such as the returns that the retained earnings have generated and if they were better than any alternative investments. Additionally, investors may prefer to see larger dividends rather than significant annual increases to retained earnings. How Retained Earnings Reflect Company Growth Undistributed earnings are retained for reinvestment back into the business, such as for inventory and fixed asset purchases or...
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