Retained Earnings in a Cash Flow Statement refer to the net profits that have not been paid out as dividends, but instead are reinvested back into the business. This is one of the key components of a company’s equity equation and indicates how much money is available for expansion, growth, and other capital opportunities. It’s an important part of staying solvent and keeping costs controlled, since it can help reduce the need to borrow additional funds from external sources. Understanding retained earnings as part of a company’s overall financial health is essential for any business owner or investor.