Retained earnings is the amount of cash that has been generated by the firm through its operations but has not been paid out to stockholders as dividends. Retained earnings are kept in cash or near cash accounts, and thus these cash accounts, when added together, will always be equal to the total retained earnings of the firm.

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Retained earnings represent the cumulative amount of net income earned by a company that is retained by the company rather than distributed to its shareholders as dividends. Retained earnings are not necessarily kept in cash or near cash accounts; they can be reinvested in the company's operations, such as for purchasing assets, paying down debt, or funding new projects.

Retained Earnings Is the Amount of Cash That Has Been