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 ...

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 ...

Both types of dividend reduce retained earnings and impact shareholders' equity. However, only cash dividends reduce cash on the balance sheet. Retained earnings represent the cumulative net ...