Additions to Retained Earnings is an account on the balance sheet that represents money added to a business’s profits over time. It can be thought of as a company’s cumulative wealth, which is made up of past profits plus additional investments from shareholders. Since Additions to Retained Earnings is listed at the bottom line of the Balance sheet, all prior earnings and expenses must be tallied before it can be properly calculated. By tracking these inflows and outflows, companies are able to get an accurate assessment of their overall financial health. Additions to Retained Earnings is a key indicator for investors, since it gives them insight into how profitable a business has been in the past and how likely it is to remain profitable in the future.