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Accounting
Statement of Retained Earnings
A short financial statement that shows how retained earnings changed during the period.
This statement connects the income statement (net income) to the balance sheet (ending retained earnings). It's sometimes combined with the statement of stockholders' equity.It's like a report card that shows your starting allowance, plus what you earned, minus what you spent, and what you have left.
Real world: It starts with last year's ending retained earnings, adds this year's net income, subtracts dividends paid, and gives the new ending balance.
💡 The statement of retained earnings is the bridge that shows exactly how much profit the company kept inside the business instead of paying out.