If you’re operating your business through a Limited Company, Retained Earnings is a key component of your financial statements, and most importantly is one of the key indicators of your businesses financial health. In this video we will go through retained earnings explained in 5 mins as follows:

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⏱ Time Stamps:
0:00 Introduction
0:52 Where can Retained Earnings be seen on your financial statements?
1:42 What is the definition of Retained Earnings?
2:10 How does Retained Earnings connect the Income Statement and Balance Sheet?

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If you run a limited company business, then where can you find your retained earnings in your financial statements?
It is on your Balance Sheet, sometimes known as the Statement of Financial Position under the equity section. Here in the UK, this is often called Capital & Reserves, and retained earnings can also be known as the profit & loss account – confusing, yes! Welcome to jargon infested language of accounting and tax!

Nonetheless, retained earnings explained is a vital key metric that any business owner or finance expert should measure and be aware of. It's not optimal to have excessive retained earnings and it certainly does not make your situation easy if your retained earnings explained is less than optimal.

We hope this video has helped you understand the concept of retained earnings and taken you one step closer to knowing your numbers.

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Our videos are for general guidance, education and empowerment in helping you understand accounting, tax and your numbers. They in no way constitute specific advice to your specific circumstances. Me & my team would be delighted to help you with your specific queries or accounting requirements through a formal engagement.