Retained earnings are the cumulative profits that a business holds onto for operations after any dividends have been paid. Retained earnings refer to the portion of a company’s net income that ...

Here is the formula for calculating dividends: Annual net income minus net change in retained earnings = dividends paid. Image source: Getty Images. Second, the income statement in the annual ...

The complete calculation is below ... to calculate dividends paid by subtracting the change in the company's retained earnings over the course of the year from its annual net profit.