How to find retained earnings?

Retained earnings show the part of net income or the total profit depicted on the company’s income statement, which is not paid out as dividends. It refers to the earnings which are retained by the firm and are often reinvested for research and development. 

It can be used to replace equipment or pay off debts. The earning is not the company’s current cash equivalent. It refers to the historical tally of the net earnings, which are not paid out to shareholders. 

All the company’s earnings end up as cast or equivalents (that include the marketable securities) or the amount invested back into the business.

The retained profit boosts the company’s value and also the amount of money that is invested. If the company uses the retained earnings to produce above-average returns, it is considered better off to keep the earnings than to pay out to the shareholders.