Retained earnings


D

damnhardtofind

How do you calculate these?

I thought it was

Change in retained earnings = Income - Dividends

but that doesnt seem to work always.
 
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R

Rusty

How do you calculate these?

I thought it was

Change in retained earnings = Income - Dividends

but that doesnt seem to work always.
Retained Earnings are the profits kept in the company after payment of
dividends. So where are you seeing a discrepancy?

Rusty
 
D

damnhardtofind

Rusty said:
Retained Earnings are the profits kept in the company after payment of
dividends. So where are you seeing a discrepancy?

Rusty
For example, Cisco Systems:

2006 2005
Net Income 5,580.0 5,741.0
Gross Dividends - Common Stock 0.0 0.0
Retained Earnings (Accumulated Deficit) -617.0 506.0
 
R

Rusty

For example, Cisco Systems:

2006 2005
Net Income 5,580.0 5,741.0
Gross Dividends - Common Stock 0.0 0.0
Retained Earnings (Accumulated Deficit) -617.0 506.0
You are comparing Net Income for a period with Accumulated Retained
Earnings.

The balance sheet should look like this;

Retained Earnings at beginning
Plus Net Income this period
Minus Dividends Paid
Equals Retained Earnings at end

Does that help?

Rusty
 
D

damnhardtofind

Rusty said:
You are comparing Net Income for a period with Accumulated Retained
Earnings.

The balance sheet should look like this;

Retained Earnings at beginning
Plus Net Income this period
Minus Dividends Paid
Equals Retained Earnings at end

Does that help?

Rusty
506.0
+ 5,580.0
- 0.0
= 6086

Why is it not -617.0?
 
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B

bakerjm75

One thing to keep in mind is that sometimes there are prior period
adjustments made. Unless you are looking at the Statement of Retained
Earnings, you're not going to see all reasons of why your figures don't
match.
 

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