Retained Earnings On Cash Flow Statement

Retained earnings on a cash flow statement refers to the difference between the amount of net income earned by a company and the amount of dividends paid out to shareholders. It is a measure of how much profit is kept within the business to be reinvested in operations, research and development, or other growth initiatives. It is also an indicator of a company’s financial health, since it can reveal whether they are able to keep enough of their profits to stay operational. Companies with large retained earnings typically have the capital to make big investments in the future, while those with negative retained earnings may not.