Definition
Retained earnings
The cumulative profits a company has kept rather than paid out — every year's net income, less every dividend, since founding. It is the line where the income statement accumulates into the balance sheet; a negative balance (an accumulated deficit) records a history of losses or of distributions beyond earnings.
Ending retained earnings = Beginning retained earnings + Net income − Dividends
- Profitability
- net income is the only organic inflow — losses drain the balance directly.
- Payout policy
- dividends and some buyback structures reduce it — capital returned is capital not retained.
Balance sheet + statement of stockholders' equity. 10-K Item 8 — one line within stockholders' equity; the equity statement shows the year's roll-forward from net income and dividends.
XBRL concepts Echelon grounds to: RetainedEarningsAccumulatedDeficit
- Heavy buyback programs can push retained earnings and total equity negative at healthy companies — read the roll-forward, not the sign alone.
Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.