Are the sum of a company's profits, after dividendpayments, since the company's inception. They are also called earned surplus, retained capital, or accumulated earnings.
(EXAMPLE):
Let's assume Company XYZ has been around for five years. During this time, it reported the following net income:
Year 1: $10,000
Year 2: $5,000
Year 3: -$5,000
Year 4: $1,000
Year 5: -$3,000
Assuming Company XYZ paid no dividends during this time, XYZ's retained earnings equal the sum of its net profits since inception, or in this case, $8,000. In subsequent years, XYZ's retained earnings will change by the amount of each year's net income, less dividends.
The retained earnings statement summarizes changes in retained earnings for a fiscal period, and total retained earnings appear in the shareholders' equity portion of thebalance sheet. This means that every dollar of retained earnings means another dollar of shareholders' equity ornet worth.
A company's board of directors may apprompany's retained earnings when it want to restrict dividend distributions to shareholders. Appropriations are usually done at the board's discretion, although bondholders and other circumstances may contractually require the board to do so. Appropriations appear as a special account in the retained earnings section. When an appropriation is no longer needed, it is transferred back to retained earnings. Because retained earnings are not cash, a company mayfund appropriations by setting aside cash or marketable securities for the projects indicated in the appropriation.
Why its important
It is important to understand that retained earnings do not represent surplus cash or cash left over after the payment of dividends. Rather, retained earnings demonstrate what a company did with its profits.
The losing of sales by Ann Taylor in this scenario is known as cannibalization.
<h3>What is cannibalization?</h3>
It should be noted that cannibalization simply means the reduction of the sales of a company.
This reduction simply occurs when the company introduces another similar product just as illustrated by Ann Taylor.
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Answer:
develop a plan
Explanation:
President Roslin of Country XYZ knows that a new policy is needed to help solve the problem of rising unemployment in her nation. Her next step is to develop a plan.
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Answer:
$38,933
Explanation:
A=P( 1 + r/100)^n
A= amount
r= rate(4%)
n=period (5)
A=32,000 ( 1 + 4/100)⁵
A=32,000 (1.04)⁵
A=38,932.89
A=$38,933( nearest whole number)
Answer:
$359.72
Explanation:
In this case , the gross pay will the pay per hour mulitplied by hours worked.
=46 X $7.82
=$359.72
