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Companies sell a product or provide a service so they charge a fee for this, which is called revenues. If revenues exceed the company's expenses then they will have net income. Net income that is retained by a company is called retained earnings.
At the end of each accounting period if there is net income by a campny the company will usually retain or should retain a portion of their net income. Retained profit, which is otherwise known as retained earnings increases because at the end of an accounting period a company will retain their net income for future plans like for expanding the company.
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