What is the retained earnings formula?

Ending Retained Earnings = Beginning Retained Earnings + Net Income − Dividends Paid. A net loss replaces net income with a negative value, reducing the balance.

Can retained earnings be negative?

Yes. A negative retained earnings balance is called an accumulated deficit. It occurs when cumulative net losses and dividends exceed cumulative net income since the company's founding.

Do dividends include stock dividends?

Yes. Both cash dividends and stock dividends reduce retained earnings. Enter the total fair value (or par value for small stock dividends) of all dividends declared during the period.

How is retained earnings different from cash?

Retained earnings is an equity account representing cumulative undistributed profits. It is not a cash balance — a company can have high retained earnings with little cash if profits were reinvested in assets.

When does the period begin and end?

The period matches your fiscal year, quarter, or month. The ending balance of one period becomes the beginning balance of the next, which is why multi-period tracking is useful for trend analysis.

Retained Earnings Calculator

Name: Retained Earnings Calculator
Availability: InStock
Author: Nham Vu

Enter beginning retained earnings, net income (or net loss), and dividends paid to instantly compute ending retained earnings.

Period Inputs

Statement of Retained Earnings

Fill in at least one period and click Calculate.

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Summary

Enter beginning retained earnings, net income (or net loss), and dividends paid to instantly compute ending retained earnings.

How it works

Enter the beginning retained earnings balance (use a negative value for a deficit).
Enter net income for the period — or enter a negative value for a net loss.
Enter total dividends paid (cash or stock) as a positive number.
The calculator applies the formula: Ending RE = Beginning RE + Net Income − Dividends.
Add more periods to build a multi-year retained earnings statement.
Export or copy the full statement for use in financial reports.

Use cases

Prepare or verify the statement of retained earnings for annual reports.
Project future retained earnings under different dividend scenarios.
Check retained earnings for loan covenants or equity analysis.
Teach the retained earnings formula in accounting courses.
Reconcile beginning and ending equity balances on the balance sheet.

Frequently Asked Questions

Last updated: 2026-06-11 · Reviewed by Nham Vu