Retained earnings is the net amount retained by the entity or corporation over a period of time until the reporting time or fiscal year end. This total amount excludes any dividends that need to pay out to investors.
Retained earnings also know as accumulated earnings. and if the values became negative then its called retained loss or accumulated loss.
Businesses keep retained earnings for investment, new asset purchase, operational expenses etc.
How to calculate retained earnings?
Formula: Beginning retained earnings + Net income – Dividends