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Accounting
Retained Earnings
The money a company has earned over the years that it keeps inside the business instead of paying out as dividends.
Retained earnings appear on the balance sheet under owners' equity. It's increased by net income and decreased by dividends or losses. It's the main way companies grow without borrowing or selling new shares.It's like the piggy bank where a kid puts all their leftover allowance instead of spending it on candy every week.
Real world: Apple has hundreds of billions in retained earnings because it keeps most of its huge profits to invest in new products and buy back stock.
💡 Retained earnings show how much a company has actually saved and reinvested — strong retained earnings usually mean a healthy, growing business.