Calculation formula of retained earnings rate

Calculation formula of retained earnings

Calculation formula of retained earnings ： Retained earnings ＝( Net profit - All dividends )/ Net profit . Retained earnings ratio refers to the ratio of net income to net income after deducting all dividends , This indicator is used to measure how much of the total income of the current period remains in the company for company development , Retained earnings ratio and dividend payout ratio are a pair of indicators , shift .

 

Retained earnings ：

Retained earnings refers to the internal accumulation retained in the enterprise extracted or formed from the profits realized over the years , Including surplus reserves and undistributed profits .

Surplus reserve ： The accumulated capital withdrawn from the net profit by the enterprise in accordance with relevant regulations . company The surplus reserve of a state-owned enterprise includes legal surplus reserve and discretionary surplus reserve . The legal surplus reserve refers to the surplus reserve withdrawn from the net profit by the enterprise in accordance with the prescribed proportion . Discretionary surplus reserve refers to the surplus reserve withdrawn by the enterprise in accordance with the resolutions of the shareholders' meeting or the general meeting of shareholders . The surplus reserve withdrawn by the enterprise can be used to cover losses after approval 、 Increase capital or distribute cash dividends or profits .

Undistributed profit ： The net profit realized by the enterprise will cover the loss 、 After withdrawing the surplus reserve and distributing profits to investors, it is left in the enterprise , Profit balance over the years . Relative to other parts of owner's equity , Enterprises Have greater autonomy in the use of undistributed profits .

 

Accounting of retained earnings ：

Enterprises should set “ Surplus reserve ” subject , Accounting for the increase and decrease in the withdrawal and use of surplus reserves , And in “ Surplus reserve ” Set under the account “ Statutory surplus reserve ”、“ Discretionary surplus reserve ” and “ Statutory public welfare fund ” Three detailed accounts , Calculate the surplus reserves and their use extracted from the net profit of the enterprise respectively .

The undistributed profits of the enterprise should be passed “ Profit distribution ” Account . End of the year , The enterprise should realize the net profit of the whole year , since “ This year's profit ” Account transfer in “ Profit distribution —— Undistributed profit ” subject , And will “ Profit distribution ” The balance of other relevant detailed accounts under the account , into “ Undistributed profit ” Detailed subjects . After carry forward ,“ Undistributed profit ” Credit balance of detailed account , Is the amount of accumulated undistributed profits . If there is a debit balance , Then it means the amount of accumulated uncovered losses . For the uncovered losses, the pre tax profits realized in the following years can be used to make up , However, the compensation period shall not exceed five years .