Retained Earnings is a key financial concept that business owners and investors must understand. At its core, Retained Earnings is the accumulation of profit from prior years after paying out dividends to shareholders. This accumulated profit is kept in the company to fund future investments, pay off debt, or just simply reinvest into the business. In other words, it’s an internal pool of funds generated by the company to help it grow and meet its long-term financial goals. For any company, Retained Earnings are crucial – they can be used to strengthen the balance sheet and give the business more options when it comes to investing in its future.