What are retained earnings
What are retained earnings? Why are they important?
Expert
Retained earnings stand for the sum of all the earnings which are available to common business stockholders during its entire history, minus the entire common stock dividend’s sum which it has ever paid. The earnings which were not paid out were retained.
Retained earnings are considered important because they represent amounts reinvested in a company on behalf of the company’s owners instead of being paid out in the form of dividends.
Rs. Sales 2,40,000 Variable costs 1,44,000 Fixed costs 26,000 Profit before tax 70,000 Rate of tax 40% Firm is proposing to buy the new plant that could generate extra annual profit of Rs. 10,000. The fixed cost of new plant is expected to Rs. 4000. New plant would increase sales volume by Rs. 40,00
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