How do I calculate the statement of retained earnings report?
It is important to understand how to calculate a statement of retained earnings. In order to calculate the statement of retained earnings, you must first locate the retained earnings amount from the balance sheet under the shareholder’s equity section. Then, use the following formula:
Retained Earnings = Beginning Balance + Net Income - Dividends. With this formula, you can easily calculate the changes in retained earnings for a specific period. It is helpful to use spreadsheet software, such as Sourcetable, to make the calculations easier.