Retained Earnings Explained - Basics for Retail Traders - Improve your Analysis!

Retained Earnings Explained - Basics for Retail Traders - Improve your Analysis! A high level overview for retail traders. Also a quick discussion on negative retained earnings, also knows as Accumulated Shareholder Deficit, ROE or Return on Equity, the Dividend Payout Ratio, and the Retention Ratio.

Retained earnings are the cumulative net earnings or profits of a company after accounting for dividend payments. As an important concept in accounting, the word “retained” captures the fact that because those earnings were not paid out to shareholders as dividends, they were instead retained by the company.
For this reason, retained earnings decrease when a company either loses money or pays dividends and increase when new profits are created.
Key Takeaways:
Retained earnings (RE) are the amount of net income left over for the business after it has paid out dividends to its shareholders.
The decision to retain the earnings or distribute them among shareholders is usually left to company management.
A growth-focused company may not pay dividends at all or pay very small amounts because it may prefer to use retained earnings to finance expansion activities.
Companies may choose to use their retained earnings for increasing production capacity, hiring more sales representatives, launching a new product, or share buybacks, among others.
Retained earnings are an important variable for assessing a company’s financial health because they show the net income that a company has saved over time, and therefore can reinvest in the business or distribute to shareholders. #TonyDenaro #RetainedEarnings #FinancialAnalysis

🦍Join the Tony Denaro channel to get access to perks, basic Discord and a membership chat badge: https://www.youtube.com/c/TonyDenaro/Join
🏆 SUBSCRIBE! https://www.youtube.com/c/TonyDenaro?sub_confirmation=1
🧡 DISCORD! Support the Channel & get FULL access to the Tony Denaro Discord including Tony's trades with a VIP membership.
Be sure to link Patreon and Discord before signing up: https://www.patreon.com/TonyDenaro
🐤TWITTER: https://twitter.com/Tony_Denaro
💹 STOCKTWITS: https://stocktwits.com/TonyDenaro
📶 TWITCH backup livestream (add it now!): https://www.twitch.tv/tonydenaro
📰 REDDIT: https://www.reddit.com/r/TonyDenaro/

🧡 Discord is a free perk for supporters of the channel via YouTube Join button or Patreon.
1) Discord via Patreon CLICK HERE: https://www.patreon.com/TonyDenaro
How to link Patreon and Discord: https://bit.ly/3Tc3MGp
2) Discord via YouTube (includes colored badge in Youtube chats) CLICK HERE: https://bit.ly/3PLj0z2
How to link Discord and YouTube: https://bit.ly/3pD4W0b

💥Links for Content Creators:💥
1) Best free software for Collab videos - Restream: https://restream.io/join/TonyDenaro
2) Diversify where your content is published, sign up for Rumble: https://rumble.com/register/TonyDenaro/
💥Links for Content Creators💥

Send Tony Denaro something:
Tony Denaro
10900 Research Blvd
Suite 160-C #196
Austin, TX 78759

DISCLAIMER: Content, strategies and opinions on this channel are for entertainment purposes only. These are Tony's opinions, not specific investment or legal advice for you. Always do your own due diligence, read company filings and financial statements and seek a duly licensed professional for investment, tax or legal advice. Past performance is not a predictor of future results. This is not personalized but rather general educational and informational material.