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Retained Earnings Calculator

Reconcile opening retained earnings with net income and dividends for the period.

Runs locally

Inputs and results stay in this browser. Currency symbols are illustrative; use any consistent currency.

Closing retained earnings$58,000.00
Change during period$8,000.00

Understand Retained earnings

One idea, three depths

Choose how deeply to explain Retained earnings

Reconcile opening retained earnings with net income and dividends for the period.

Age 5Explain it to a 5-year-oldStart with a picture

Imagine using Retained earnings to answer this question: reconcile opening retained earnings with net income and dividends for the period? Enter Opening retained earnings, Net income, Dividends or distributions; the calculator shows Closing retained earnings. For example: $50,000 opening retained earnings plus $12,000 net income less $4,000 dividends closes at $58,000. The answer tells you Closing retained earnings.

Age 15Explain it to a 15-year-oldConnect it to the formula

Profits increase retained earnings and distributions to owners reduce them. Prior-period adjustments are outside this compact model. The rule is Closing retained earnings = Opening retained earnings + net income − dividends. Its input values are Opening retained earnings, Net income, Dividends or distributions, and the main result is Closing retained earnings. For example: $50,000 opening retained earnings plus $12,000 net income less $4,000 dividends closes at $58,000.

CollegeExplain it at college levelState the model precisely

This calculator evaluates one accounting relationship within a consistent entity, currency, reporting period and recognition policy. The implemented relation is Closing retained earnings = Opening retained earnings + net income − dividends, evaluated from Opening retained earnings, Net income, Dividends or distributions to produce Closing retained earnings. Profits increase retained earnings and distributions to owners reduce them. Prior-period adjustments are outside this compact model. Recognition, measurement, tax, consolidation, foreign-currency and disclosure rules may require adjustments under the accounting framework that applies to the entity.

What this accounting tool does

Reconcile opening retained earnings with net income and dividends for the period.

Why the relationship works

Profits increase retained earnings and distributions to owners reduce them. Prior-period adjustments are outside this compact model.

The accounting formula

Closing retained earnings = Opening retained earnings + net income − dividends

Inputs and period consistency

This model uses Opening retained earnings, Net income, Dividends or distributions. Use the same reporting period, currency, entity boundary and accounting policy for every input.

What the result means

The primary output is Closing retained earnings; supporting outputs include Change during period. Trace each amount back to the relevant ledger or statement line before relying on it.

Worked accounting example

$50,000 opening retained earnings plus $12,000 net income less $4,000 dividends closes at $58,000.

Limits of this compact model

The calculator teaches one relationship. Recognition, measurement, tax, consolidation, foreign-currency and disclosure rules may require additional adjustments under the framework that applies to the entity.

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Supporting sourcesAcademic referencesPrimary standards, textbooks and complete citations

Standards, reading and academic references

Use the calculator as the worked interaction, then consult the primary standards and academic textbooks listed below. MW SysArc links to the original sources; the explanation on this page is original and does not reproduce them.

Principles of Accounting, Volume 1: Financial Accounting

Read the free OpenStax financial accounting textbook
Cite this book
APA 7
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters
MLA 9
Franklin, Mitchell, et al. Principles of Accounting, Volume 1: Financial Accounting. OpenStax, 2019, https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters.
Chicago author-date
Franklin, Mitchell, Patty Graybeal, and Dixon Cooper. 2019. Principles of Accounting, Volume 1: Financial Accounting. Houston, TX: OpenStax. https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters.

OpenStax entries are free to read online. Follow the licence shown on each linked source before redistributing or adapting its content.

Reuse the page responsiblyCite this pageAPA, MLA, Chicago, Harvard, BibTeX and RIS

These formats cite this calculator page itself. They are separate from the academic references above, which support the mathematical method and terminology.

Organizational author: MW SysArc. Published:. Canonical page:https://accounting.mwsysarc.com/retained-earnings.

APA 7

MW SysArc. (2026, July 21). Retained Earnings Calculator. MW SysArc Tools. https://accounting.mwsysarc.com/retained-earnings

MLA 9

MW SysArc. “Retained Earnings Calculator.” MW SysArc Tools, 21 July 2026, https://accounting.mwsysarc.com/retained-earnings. Accessed 26 Aug. 2026.

Chicago 17

MW SysArc. “Retained Earnings Calculator.” MW SysArc Tools. Published July 21, 2026. Accessed August 26, 2026. https://accounting.mwsysarc.com/retained-earnings.

Harvard

MW SysArc (2026) ‘Retained Earnings Calculator’, MW SysArc Tools. Published 21 July 2026. Available at: https://accounting.mwsysarc.com/retained-earnings (Accessed: 26 August 2026).

BibTeX and RIS records

BibTeX

@misc{mwsysarc_retained_earnings_2026,
  author = {{MW SysArc}},
  title = {Retained Earnings Calculator},
  howpublished = {MW SysArc Tools},
  year = {2026},
  url = {https://accounting.mwsysarc.com/retained-earnings},
  note = {Published July 21, 2026; accessed August 26, 2026}
}

RIS

TY  - ELEC
AU  - MW SysArc
TI  - Retained Earnings Calculator
T2  - MW SysArc Tools
PY  - 2026
DA  - 2026-07-21
Y2  - 2026-08-26
UR  - https://accounting.mwsysarc.com/retained-earnings
N1  - Published July 21, 2026
ER  -

Clear answers

Frequently asked questions

What does the Retained earnings do?

Reconcile opening retained earnings with net income and dividends for the period.

How does the Retained earnings work?

The calculator applies Closing retained earnings = Opening retained earnings + net income − dividends. Profits increase retained earnings and distributions to owners reduce them. Prior-period adjustments are outside this compact model.

What can I learn from the Retained earnings?

You will connect Opening retained earnings, Net income, Dividends or distributions to Closing retained earnings, then see how the relationship belongs in the accounting process.

Does MW SysArc receive or store what I enter?

No. The calculation runs locally in your browser. MW SysArc does not receive or store your calculation inputs.

How should I use the result?

Use the result as an educational or reconciliation reference. Confirm the reporting period, accounting policy and source records before relying on it.

Last reviewed . Calculations tested .

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