Retained earnings is the percentage of net earnings not paid out as dividends but retained in the
business by the company for reinvestment or can be used to pay down debt,
retained earnings is a safety net for the company. Negative accumulated
retained earnings is a sign that the company has not consistently earned profit
over a long period of time. This is a sign that management is not performing
and could affect the company’s growth and expansion and shareholders should not
expect dividend soon.
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