Explore commonly used personal finance terms.
Accumulated earnings, also known as retained earnings, represent the portion of a company’s profits that are kept within the business for reinvestment, rather than being distributed to shareholders as dividends. Accumulated earnings support growth initiatives, debt reduction, and reserve creation. These retained profits are recorded in the equity section of the balance sheet, reflecting management’s decision to reinvest profits to strengthen the company’s financial position and improve shareholder value over time.
