Retained earnings are the cumulative profits that a business holds onto for operations after any dividends have been paid. Retained earnings refer to the portion of a company’s net income that ...

Here is the formula for calculating dividends: Annual net income minus net change in retained earnings = dividends paid. Image source: Getty Images. Second, the income statement in the annual ...

Cash dividends affect the cash and shareholder equity on the balance sheet; retained earnings and cash are reduced by the total value of the dividend. Stock dividends have no impact on the cash ...