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 ?
Estimate retained losses at higher confidence levels (to assess variability of results).
We should also have to reduce par value to wipe out retained losses.
With this protection over aggregated retained losses, the insured may also take a higher retention and save risk transfer premium dollars," says O'Brien.
The Wrexham-based listed company, whose products include its Volplex blood plasma replacement and its OptiFlo range of catheter cleansing products, reported retained losses of pounds 663,760, a fall of 41% on the previous year.
The potential cost of risk for an organization includes: the internal risk management department, outside consultants, retained losses (such as deductibles), insurance premiums and indirect costs, such as loss of productivity, cost of overtime and opportunity costs.
For the first time in six years, flat premiums and substantially higher retained losses have driven up the average cost of risk in the U.
Cost of risk is the sum of all insurance premiums, retained losses, allocated loss adjustment expense and administrative expenses.
The savings that may be generated by a self-insurance program are computed by comparing premiums that would have been paid with the retained losses paid.
7% of company's total equity, excluding Pemex policy in which retained losses can reach 4%.
QBE says its preliminary estimation of retained losses from Sandy is between $350 million and $400 million.
The obvious purposes of an actuarial report include a reserve estimate to support the company's financial statements and an estimate of retained losses for the upcoming year to support the company's budgeting process.
For example, an aggregate catastrophe cover would pick up the accumulation of retained losses above either a dollar or loss ratio retention.