Retained earnings

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Retained earnings

Accounting earnings that are retained by the firm for reinvestment in its operations; earnings that are not paid out as dividends.

Undistributed Profits

The amount of a publicly-traded company's post-tax earnings that are not paid in dividends. Most earnings retained are re-invested into the company's operations. Year-on-year tracking of the ratio of undistributed profits to dividends is important to fundamental analysis to investigate whether a company is increasing or decreasing its rate of re-investment. Undistributed profits form part of a company's equity, and are owned by shareholders. They are also called retained earnings, accumulated profits, undivided profits, and earned surplus.

retained earnings

The accumulated net income that has been retained for reinvestment in the business rather than being paid out in dividends to stockholders. Net income that is retained in the business can be used to acquire additional income-earning assets that result in increased income in future years. Retained earnings is a part of the owners' equity section of a firm's balance sheet. Also called earned surplus, surplus, undistributed profits. See also accumulated earnings tax, restricted retained earnings, statement of retained earnings.

Retained earnings.

Retained earnings, also known as retained surplus, are the portion of a company's profits that it keeps to reinvest in the business or pay off debt, rather than paying them out as dividends to its investors.

Retained earnings are one component of the corporation's net worth and increase the supply of cash that's available for acquisitions, repurchase of outstanding shares, or other expenditures the board of directors authorizes.

Smaller and faster-growing companies tend to have a high ratio of retained earnings to fuel research and development plus new product expansion. Mature firms, on the other hand, tend to pay out a higher percentage of their profits as dividends.

References in periodicals archive ?
Total stockholders' deficit was restated from $(465,183) to $(665,183) and net loss was restated from $(248,586) to $(308,586).
Total stockholders' deficit was restated from $(650,104) to $(910,104) and net loss was restated from $(450,026) to $(570,026).
0 million of stockholders equity at the end of the third quarter of 2003 and expects an estimated stockholders' deficit between $23.
The amendments were made because of the determination that certain redemption features contained in the Company's Series C convertible preferred stock required that the Series C stock be reclassified to the temporary equity section of the balance sheets rather than permanent stockholders' deficit.
OB), a nutritional supplement company focused on active lifestyles, announced that it has completed conversions by investors of warrants to purchase an aggregate of 715 million shares of its common stock, which as of June 30, 2012 (unaudited) represented a derivative liability of $7,909,000 contributing to a stockholders' deficit of $11,417,000.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except par value amounts) June 30, December 31, 2009 2008 ASSETS Current Assets: Cash and cash equivalents $136 $554 Accounts receivable 289 341 Inventories, net 6 20 Prepaid expenses 58 56 -- -- Total current assets 489 971 Property and equipment, net 134 169 Other assets 39 39 -- -- TOTAL ASSETS $662 $1,179 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Loan payable to officer $835 $480 Accounts payable and accrued expenses 547 538 Deferred revenue 416 1,090 Dividends payable 276 187 Total current liabilities 2,074 2,295 Commitments and contingencies Stockholders' Deficit: Preferred stock, $.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except par value amounts) March 31, December 31, 2009 2008 ASSETS Current Assets: Cash and cash equivalents $174 $554 Accounts receivable 200 341 Inventories, net 16 20 Prepaid expenses 61 56 Total current assets 451 971 Property and equipment, net 152 169 Other assets 39 39 TOTAL ASSETS $642 $1,179 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Loan payable to officer $630 $480 Accounts payable and accrued expenses 487 538 Deferred revenue 750 1,090 Dividends payable 234 187 Total current liabilities 2,101 2,295 Stockholders' Deficit: Preferred stock, $.