equity

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

equity

Postby chandniwadhwani92 » Tue Nov 04, 2014 7:14 pm

As we know shareholders equity formula - share capital+retained earning-treasury shares
HOW COMPANY CALCULATE RETAINED EARNING IN THIS

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

equity

Postby edupristine » Wed Nov 05, 2014 11:31 am

Retained earnings refers to money a company has earned and not used for paying expenses or dividends.When finalizing your balance sheet, you need to know how to calculate the company's new retained earnings.

Before you do so, you need to know the retained earnings from the previous year, the company's net income and the amount of money the company paid in dividends.

The calculation is:

+ Beginning retained earnings
+ Net income during the period
- Dividends paid
= Ending retained earnings


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