Instruction
1
The calculation of retained earnings is very simple, just to substitute the values in one of the following formulas and to know the amount of net profit/loss of the company.
2
In order to calculate retained earnings will require knowledge of the following indices: retained earnings at beginning of the period net profit (Net Income or Net Profit) or net loss (Net Loss) and cash dividends paid.
3
After collecting all data for calculations, substitute the values in the following formula:
RE1 = RE0 + Net Income – Dividends,
where RE1/RE0 - retained earnings at the end/beginning of that period;
Net Income – net profit;
Dividends – dividends paid to shareholders.
RE1 = RE0 + Net Income – Dividends,
where RE1/RE0 - retained earnings at the end/beginning of that period;
Net Income – net profit;
Dividends – dividends paid to shareholders.
4
In the event that the company in the current period received no net income, but rather net loss, the calculation is carried out according to the following formula:
RE1 = RE0 - Net Loss – Dividends,
where, as has become clear Net Loss - net loss.
RE1 = RE0 - Net Loss – Dividends,
where, as has become clear Net Loss - net loss.