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RETAINED EARNING

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How to Calculate Retained Earnings?

The formula to calculate retained earnings is quite simple. The figure is calculated by adding the net profits (less dividends paid) to theUnappropriated retained earnings-Negative retained earnings-pic beginning retained earning balance from a previous period:



Retained Earnings (RE) = Beginning RE + Net Income – Dividends



If there is a net loss and it is larger than the beginning retained earnings, there will be what is called negative retained earnings.

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