Retained Earnings
The retained earnings are the net profits kept to accumulate in a business after dividends are paid. It can be written as follows: Retained earnings: EPS - DIV1 where EPS are earnings per share and DIV1 is the (announced) dividend |
Similar financial terms
Diluted earnings per shareA calculation of earnings per share. Add conversion value or preferred stock and convertible bonds to net profit, then divide the result by the number of outstanding shares of common stock that would exist after full conversion; the result is expressed as a dollar value per share.
Earnings per share
The latest reported net earnings, divided by the number of outstanding shares of common stock; one of the most widely used forms for reporting earnings, also called basic earnings per share and distinguished from diluted earnings per share.
Growth in earnings per share
A ratio comparing current earnings per share to the same ratio in a base year; it is used to track rates of growth for the economy.
Accounting earnings
Earnings of a firm as reported on its income statement.
Price/earnings ratio
Shows the "multiple" of earnings at which a stock sells. Determined by dividing current stock price by current earnings per share (adjusted for stock splits). Earnings per share for the P/E ratio is determined by dividing earnings for past 12 months by the number of common shares outstanding. Higher "multiple" means investors have higher expectations for future growth, and have bid up the stock's price.
Low price-earnings ratio effect
The tendency of portfolios of stocks with a low price-earnings ratio to outperform portfolios consisting of stocks with a high price-earnings ratio.
