ECONOMICS

Detailed explanation-1: -Retained earnings are the amount of profit a company has left over after paying all its direct costs, indirect costs, income taxes and its dividends to shareholders.

Detailed explanation-2: -Retained profit is the amount of a business’s net income that is kept within its accounts, rather than paid out to shareholders. Retained profit is a strong indicator of the long-term financial stability of a business.

Detailed explanation-3: -A dividend is a share of profits and retained earnings that a company pays out to its shareholders and owners.

Detailed explanation-4: -Retained earnings are also called earnings surplus and represent reserve money, which is available to company management for reinvesting back into the business. When expressed as a percentage of total earnings, it is also called the retention ratio and is equal to (1-the dividend payout ratio).

Detailed explanation-5: -Retained Earnings is all net income which has not been used to pay cash dividends to shareholders. The accounting concept is part of the balance sheet. It appears in the equity section and shows how net income has increased shareholder value.