Retained Earnings (RE) are the cumulative part of a company's profits that are not given to shareholders as dividends but are instead saved for reinvestment back into the company. Typically, these funds are utilised to acquire working capital and fixed assets (capital expenditures) or to pay off debt commitments.
Any changes or movements in net income will have an immediate impact on the RE balance. A rise or fall in net income, as well as the occurrence of a net loss, will pave the way for either firm profitability or deficit. Due to huge, cumulative net losses, the Retained Earnings account might be negative
Sales income, cost of goods sold, depreciation, and other operational expenditures are examples of these items. Non-cash items like as write-downs or impairments, as well as stock-based remuneration, have an impact on the account.
learn more about Retained Earnings refer
https://brainly.com/question/25631040
#SPJ4
