HOW DO SMALL BUSINESSES USE RETAINED EARNINGS

Having some funds to keep back- Retained earnings (REs)  is one of the primary features of a successful business. Small businesses that are still growing need to have some funds in reserve for reinvestment so that the business continues to progress. Usually, some people choose to regard retained earnings as retained trading profits or earnings surplus because of how the money is realized. 

Furthermore, these extra profits on a balance sheet represent a form of equity and show the worth of a business. As a result, the way a business, especially a small business manages its retained earnings makes a difference regarding its success and failure. Therefore, if you are a small business owner, in this blog post, you will discover what REs are and how accountants can help you make the most of it.