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 the
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.
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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