When your company makes a profit, you can issue a dividend to shareholders or keep the money. The profits you keep are called retained earnings. You can use retained earnings to fund working capital, ...

One of the benefits of understanding how the income statement and balance sheet work together is that you can figure out missing pieces of information based on numbers elsewhere in the financial ...

Simply stated, a balance sheet is a statement of your business' worth: a snapshot of your business position on a given day, usually calculated at the end of the month or quarter. It is a listing of ...

Net income seems straightforward: It is the result when expenses (administrative expenses, business expenses, interest expenses, operating costs and other expenses) are subtracted from revenue. This ...

The link between a balance sheet and an income statement is obvious, but it's also tricky. The more income your business earns, the more value should show up on its balance sheet. But the calculations ...

One of the most useful metrics in assessing a company's profitability is earnings per share, and it can be calculated from information found on that company's balance sheet and income statement, two ...

Financial intelligence can be a hard topic to broach with business owners because they are constantly measuring their business by what is in their bank account. And although many entrepreneurs ...

Stockholders' equity equals assets minus liabilities, framing investor stake after creditors. Paid-in capital includes monies from stock sales, often split into par value and excess amounts. Retained ...

Many investors focus on how much a company pays in dividends. Most companies report their dividends on a cash-flow statement or in a separate accounting summary in their regular disclosures to ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Michael Boyle is an experienced financial ...

A balance sheet displays what a company owns, what it owes, how it's financed, and its shareholders' equity at a particular point in time. An income statement displays the company's revenues and ...