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Finance: What are retained earnings? 26 Views
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Description:
What are retained earnings, and do they give you cankles?
- Social Studies / Finance
- Finance / Financial Responsibility
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- Finance / Finance Definitions
- Life Skills / Finance Definitions
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Transcript
- 00:00
Finance allah shmoop what are retained earnings You know when
- 00:07
you eat really salty food and the next day you
- 00:10
have cankles it's all that water desperately trying Teo get
- 00:15
youto wiz out the loads of sodium chloride in your
- 00:17
body That's retained water well retained earnings and i'll sort
Full Transcript
- 00:22
of work the same way you run a plastic cup
- 00:24
stamping business with catchy little phrases on the cubs Last
- 00:28
year you had a million bucks in sales and one
- 00:31
hundred grand in after tax earnings About eighty grand of
- 00:35
that earnings was in fact cash Why didn't you retain
- 00:38
in cash one hundred percent of your earnings What happened
- 00:42
to the twenty grand in cash there How did evaporate
- 00:44
Well you had to spend cash out of your earnings
- 00:47
on a cup plunging machine and then cost real cash
- 00:51
dough You'll amber ties that cost over time now and
- 00:54
get essentially a tax break because of it meaning you'll
- 00:57
show lesson earning so you'll pay less in taxes but
- 01:00
the cash won't change So this year's hundred grand was
- 01:03
a nice year but last year you had fifty grand
- 01:06
in cash profits and you had twenty grand in cash
- 01:09
Profits the year before then and before then you had
- 01:12
run it just cash flow break even for the previous
- 01:14
five years So it all looked like that So in
- 01:17
total you saved Or rather you retained cash earnings of
- 01:22
eighty plus fifty plus twenty or a sum total of
- 01:25
one hundred fifty grand That all now sits in your
- 01:28
b of a account doing a whole lot of nothing
- 01:31
of intern two percent a year for the privilege that
- 01:34
one hundred fifty grand that you have cumulatively retained Like
- 01:38
ankle's swelling is retained earnings which you will now use
- 01:42
to print more catchy titles in foreign languages Maybe don't
- 01:47
look up What those mean All right let's close the 00:01:49.043 --> [endTime] video now
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