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    aahuja1's Avatar
    aahuja1 Posts: 7, Reputation: 1
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    #1

    Oct 17, 2007, 12:46 PM
    formula to calculate retained earnings?
    I have been looking for a formula to calculate retained earnings and I have found so many that I am unsure what to use? Can anyone help or at least tell me if one the ones listed below is correct?

    Assets – Liabilities = Retained Earnings
    Owners Equity = Capital stock+retained earnings
    assets – liabilities-capital stock = retained earnings

    Also would I use a different formula to calculate retained earnings for the previous year?

    NEED HELP
    santys72's Avatar
    santys72 Posts: 7, Reputation: 2
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    #2

    Oct 19, 2007, 10:51 AM
    Assets - Liabilities = Stockholders Equity

    Stockholders Equity = Common Stock + Retained Earnings + APIC (Additional Paid in Capital)

    Capital Stock= Common Stock + APIC + preferred Stock

    assets – liabilities-capital stock = retained earnings

    These are formulas that you can use in very straightforward RE calculations, but stockholders equity is more than that. You have treasury stocks, appropriation of RE, Quasi Reorganiztions. Stock dividends and split stock.

    But I guess that for simple programs you can use them. I answer a problem today related to RE check it out, it can help you out.
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