Retained Earnings Calculator

How to use the retained earnings calculator

What this calculator does. It estimates how much of a company's current-period earnings remain after dividends, then expresses that retained amount on a per-share basis. It is useful for reviewing dividend policy, comparing reinvestment capacity between scenarios, checking a simple management forecast, or preparing a quick supporting schedule for a financial model. It does not calculate the full balance-sheet retained earnings account, which may also include an opening balance, prior-period losses, accounting adjustments, and other equity movements. The SEC's beginner's guide to financial statements explains how earnings, dividends, and shareholders' equity connect.

When to use it. Use the calculator when testing a proposed dividend payout, estimating funds available for reinvestment, comparing two companies on a per-share basis, or checking whether a board-level dividend assumption is mathematically consistent with forecast earnings. For historical reporting, reconcile the result to the company's statement of stockholders' equity rather than treating this current-period estimate as the complete cumulative retained earnings balance.

How to calculate. The calculator opens with a complete demonstration: $1,000,000 of earnings, a 30% dividend payout ratio, and 500,000 shares. The results and a validated example XLSX are available immediately. (1) Replace Earnings with net income for the period. (2) Enter the Dividend payout ratio as a percentage from 0% to 100%. (3) Enter the positive Number of shares outstanding. (4) Read retained earnings, dividends, retention ratio, and the per-share result. (5) Select Download Excel to export the current typed inputs and outputs. Reset clears the demonstration data and calculated content; Download Excel remains unavailable until a complete valid state is entered again.

Input guide. Earnings is a required U.S.-dollar amount and may be positive, zero, or negative; commas and a leading dollar sign are accepted, but scientific notation and decimal-comma forms are rejected. A realistic example is $1,000,000. Higher positive earnings increase both retained earnings and dividends when the payout ratio is fixed. A common mistake is entering revenue instead of net income. Dividend payout ratio is a required percentage from 0 to 100, such as 30%. Raising it increases dividends and lowers retained earnings dollar for dollar. Do not enter 0.30 for 30%; enter 30. Number of shares outstanding is a required positive count, such as 500,000. It affects only retained earnings per share, not the total retained amount. Using authorized shares instead of actual outstanding shares can materially distort the per-share result.

Output guide. Retained earnings is the current earnings amount left after modeled dividends. Dividends distributed is earnings multiplied by the payout ratio. Retained earnings per share divides retained earnings by shares outstanding and can be negative when current earnings are negative. The Retention ratio is 100% minus the payout ratio. The allocation chart is shown only for positive earnings because a part-to-whole chart would be misleading for a loss. The breakdown table lists dividends, retained earnings, total earnings, and each item's share of earnings. These outputs are exact identities under the entered assumptions, not a recommendation about how much a company should distribute.

Worked example. With earnings of $1,000,000 and a 30% payout ratio, dividends equal $1,000,000 × 30% = $300,000. Retained earnings equal $1,000,000 – $300,000 = $700,000. Dividing $700,000 by 500,000 outstanding shares gives retained earnings per share of $1.40. The retention ratio is 70%. These values match the first-open cards, chart, table, and exported workbook.

Learn more. For context, Investor.gov defines a dividend as a portion of company profit paid to shareholders, while the SEC's balance-sheet building blocks guide describes retained earnings or accumulated loss as cumulative net profit or loss since inception.