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Begin with an overview of what a statement of retained earnings represents and its importance in understanding a company's financial health.
Note the beginning retained earnings, typically from the end of the previous fiscal period.
Include the net income (or loss) from the current period's income statement, which affects the retained earnings balance.
Subtract any dividends paid out to shareholders during the period, as these are distributions of earnings.
The formula is simple: Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings.
Decide whether the statement will cover a monthly, quarterly, or annual period, aligning with other financial reports.
Ensure access to accurate financial records, including past retained earnings statements, income statements, and dividend records.
Format the document clearly, starting with the company name, title of the statement, and the reporting period at the top.
Double-check all figures and calculations to ensure the statement's accuracy before finalization.