Hi, does anyone know how to calculate Retained Earnings? Given a basic income statement and balance sheet.
This is for an online class…unfortunately the online discussions are not very active. Can someone help or point me out to a Financial Analysis or Microsoft Excel forum? I didn’t find any good ones.
[quote=“aceman”]cool cool, but what exactly constitutes “dividends paid”? I can find net income easily on my income statement, but how do I calculate dividends paid?
Sorry guys I’m a noob. I guess I’ll check out that excel forum.[/quote]
There is no set answer re: where to find ‘dividends paid.’ Different countries/companies can name or report this differently under different accounting rules.
Generally you just need to find out whether the company declared a dividend for the period. If not, net earnings = retained earnings. If they did, typically they report dividend/share. Multiply div/share by shares outstanding to arrive at the cash dividends the company has committed to pay shareholders. Then net earings - dividends = retained earnings.
This is very general. Accounting rules can be quite esoteric. Anything more complicated doesn’t belong on a message board like this.
Retained earnings include appropriated retained earnings and restricted retained earnings.
A company may not declare the dividend.so the net income=retained earnings.
But if the restricted retained earnings is necessary to keep in every term ?Or it just be kept when it needs?
Well,My English is bad .But I tried my best to express my question here.
Thanks.