Retained Earnings
Definition of Retained Earnings as it relates to Business, Accounting Principles, Financial Accounting
Retained Earnings refers to the portion of a business's profits that are kept and reinvested in the company, rather than being distributed as dividends to shareholders. It is an important concept in financial accounting, reflecting a company's accumulated earnings over time, after deducting any dividends paid out to investors. Retained Earnings is reported on a company's balance sheet and can be used to fund new projects, pay off debt, or strengthen the business's financial position. It represents a key measure of a company's profitability and financial health, and is closely watched by investors and analysts as an indicator of a company's long-term prospects.