Retained Earnings; Cumulative Net Income

Retained Earnings are a company's cumulative net income after accounting for dividend distributions.

RE gets carried over every year to the next year. In other words, a company's ending retained earnings for one year will be their beginning retained earnings for the following year.

The main ways a company can use retained earnings is by investing back into the business, paying additional dividends, or paying down debt.

The equation for ending retained earnings is: End RE = Beg RE + NI - Dividends