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How to calculate Retained earnings

The Retained earnings formula, with plain worked examples you can check yourself.

Retained earnings = Begin + NI − Dividends

Worked examples

Begin = 400 · NI = 300 · Div = 50Retained earnings = 650
Begin = 700 · NI = 400 · Div = 50Retained earnings = 1,050
Begin = 200 · NI = 500 · Div = 150Retained earnings = 550

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Check the units before you compare results.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Bookkeeping Basics.

Related terms

Retained earningsInvoiceFiscal yearAccrual accountingGross profitLedger

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