This retained earnings calculator shows how much profit your business keeps after paying dividends. Enter your beginning retained earnings, net income for the period, and dividends paid.
How Retained Earnings Are Calculated
Ending Retained Earnings = Beginning + Net Income − Dividends
Retained earnings are the cumulative profits a company has reinvested rather than paid out to owners. Each period you add net income (or subtract a net loss) and subtract any dividends or distributions. The result carries forward as the next period’s beginning balance.
Worked Example
Starting with $50,000 in retained earnings, earning $40,000 of net income, and paying $10,000 in dividends: ending retained earnings = 50,000 + 40,000 − 10,000 = $80,000.
Why It Matters
- Retained earnings fund growth — new equipment, hiring, or paying down debt — without borrowing or issuing stock.
- They appear in the equity section of your balance sheet.
- A negative balance (an accumulated deficit) signals cumulative losses over time.
Enter a net loss as a negative net income and the calculator will reduce your retained earnings accordingly.