Retained Earnings Calculator
The retained earnings calculator works out the ending balance of a company's accumulated profits, the equity that has been kept in the business rather than paid out. The method is the standard statement of retained earnings relationship: ending retained earnings equals beginning retained earnings plus net income minus dividends. Net income adds the profit earned during the period, and dividends subtract the portion handed back to shareholders, so what remains is reinvested in the business to fund growth, equipment or debt repayment. A net loss reduces the balance because you add a negative net income, and if losses and dividends together exceed the opening balance, retained earnings can turn negative, an accumulated deficit. Retained earnings are an accounting measure, not a cash balance: the money may already be tied up in inventory or assets. The figure sits in shareholders' equity on the balance sheet and links the income statement to it. Enter your own beginning balance, net income and dividends to roll forward retained earnings, model a dividend decision, or check a line in the equity statement. Every figure here is computed deterministically from the formula shown below, with a worked example that reconciles exactly to the calculator.
Ending retained earnings equals the opening balance plus net income minus dividends: ending = beginning + net income - dividends. Starting at $100,000.00, adding $150,000.00 of net income and paying $50,000.00 in dividends leaves $200,000.00.
Retained earnings formula
Ending RE = Beginning RE + NI - D
Beginning RE = retained earnings at start of period
NI = net income for the period (negative if a loss)
D = dividends declared during the period
Net income increases retained earnings and dividends reduce them. The ending balance carries forward to become the next period's beginning retained earnings.
Worked example
A company begins the year with 100,000 dollars of retained earnings, earns 150,000 dollars of net income, and pays 50,000 dollars in dividends.
- Beginning plus net income = 100,000 + 150,000 = 250,000
- Less dividends = 250,000 - 50,000
- Ending retained earnings = 200,000
Ending retained earnings is 200,000 dollars. These are the calculator's default inputs, so the result above matches the widget exactly.
Retained earnings at different dividends
Ending balance from 100,000 beginning and 150,000 net income.
| Beginning | Net income | Dividends | Ending |
|---|---|---|---|
| 100,000 | 150,000 | 0 | 250,000.00 |
| 100,000 | 150,000 | 50,000 | 200,000.00 |
| 100,000 | 150,000 | 100,000 | 150,000.00 |
Equity and balance sheet basics: US Securities and Exchange Commission, Investor.gov.
Retained earnings calculator: frequently asked questions
What are retained earnings?
Retained earnings are the cumulative profits a company has kept rather than paid out as dividends. They appear in the equity section of the balance sheet and grow each period by net income and shrink by dividends declared. Retained earnings fund reinvestment in the business, debt repayment and future growth without raising new capital.
How do I calculate ending retained earnings?
Start with beginning retained earnings, add net income for the period, then subtract dividends. With 100,000 dollars of beginning retained earnings, 150,000 dollars of net income and 50,000 dollars of dividends, ending retained earnings is 100,000 plus 150,000 minus 50,000, which equals 200,000 dollars.
Do a net loss and dividends both reduce retained earnings?
Yes. A net loss reduces retained earnings because you add a negative net income, and dividends reduce them because profits are paid out to shareholders instead of being kept. If a loss and dividends together exceed beginning retained earnings, the balance can turn negative, which is called an accumulated deficit.
Are retained earnings the same as cash?
No. Retained earnings are an accounting measure of accumulated profit kept in the business, not a pile of cash. The money may have been spent on inventory, equipment or debt repayment. A company can have large retained earnings and little cash, or strong cash and modest retained earnings, depending on how profits were used.
Where do retained earnings appear?
Retained earnings appear in the shareholders' equity section of the balance sheet. The change during the period is shown in a statement of retained earnings or within the statement of changes in equity, linking the income statement to the balance sheet. The ending balance carries forward as the next period's beginning balance.
Official sources
- Equity, balance sheets and investing basics: US Securities and Exchange Commission, Investor.gov. As at 25 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 25 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.