# Retained Earnings Calculator

URL: https://speedycalculator.com/calculators/finance/retained-earnings/
Last updated: 2026-10-25

> The retained earnings calculator works out retained earnings at the end of a period – beginning retained earnings plus net income minus dividends – and the retention ratio.

## Inputs

- Beginning retained earnings
- Net income (or loss)
- Cash dividends
- Stock dividends

## Results

- Ending retained earnings
- Retention ratio
- Payout ratio

## Formula

```
Ending retained earnings = beginning retained earnings + net income − cash dividends − stock dividends
Retention ratio = (net income − dividends) ÷ net income
```

## Explanation

Retained earnings are the cumulative profits a company has kept to reinvest rather than pay out. Negative retained earnings (an accumulated deficit) are common for young, loss-making companies.

### How to use the Retained Earnings Calculator

- **Beginning retained earnings**
- **Net income (or loss)**
- **Cash dividends**
- **Stock dividends**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter beginning retained earnings, net income and dividends paid.

### Tips

- Use consistent periods (a year or a quarter) for flow figures and period-end values for balances.
- Average opening and closing balances when a ratio mixes a flow with a stock.
- Benchmark against competitors in the same industry.
- Read the ratio together with others – profitability, liquidity and efficiency tell different stories.

### Common mistakes to avoid

- Using sales instead of cost of goods sold for inventory ratios.
- Mixing gross, operating and net profit.
- Ignoring one-off items that distort a single year.

### Inputs explained

FieldWhat to enterBeginning retained earningsAmount in your currencyNet income (or loss)Amount in your currencyCash dividendsAmount in your currencyStock dividendsAmount in your currency

### What each result means

- **Ending retained earnings** = [Beginning retained earnings] + [Net income (or loss)] - [Cash dividends] - [Stock dividends]
- **Retention ratio** = ([Net income (or loss)] - [Cash dividends] - [Stock dividends])÷[Net income (or loss)]×100
- **Payout ratio** = ([Cash dividends] + [Stock dividends])÷[Net income (or loss)]×100

### Example values

How the main result changes when **Beginning retained earnings** changes and everything else stays at the example values above:

Beginning retained earningsEnding retained earnings600,000850,000900,0001,150,0001,200,0001,450,0001,500,0001,750,0001,800,0002,050,0002,400,0002,650,000

## Worked example

Inputs — Beginning retained earnings: $1,200,000; Net income (or loss): $350,000; Cash dividends: $100,000; Stock dividends: $0.

Results — **Ending retained earnings = $1,450,000.00**; Retention ratio = 71.43 %; Payout ratio = 28.57 %.

## FAQ

**What are retained earnings?**
Accumulated profits kept in the business rather than paid as dividends.

**Are retained earnings cash?**
No – they're part of equity and may be invested in assets.

**Can retained earnings be negative?**
Yes – that's an accumulated deficit.

**What formula does the Retained Earnings Calculator use?**
Ending retained earnings = beginning retained earnings + net income − cash dividends − stock dividends.


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)