# 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.

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?

R

#### Rusty

506.0
+ 5,580.0
- 0.0
= 6086

Why is it not -617.0?
My guess is that the informaton is incorrect or incomplete.

Rusty

B

#### bakerjm75

One thing to keep in mind is that sometimes there are prior period