# Retained Earnings



## Steve64 (Jun 28, 2016)

HI everyone.
Relatively new to stock picking and have a question regarding retained earnings.

The retained earnings below (number's in 1,000's) stated on a balance sheet of a company with a market cap of 1.13bil appear to be a big red flag (co has negative earnings) 










When subtracting the total total Liabilities from the total Assets though.....

















we can see there are approx 108 mil left over (which I understand should be the retained earnings.

Can someone help me get my head around this?

The stock is LOVE and above data pulled off their balance sheet.

thanks in advance.


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## RussT (Jul 11, 2016)

Basic answer...

Assets - Liabilities = Shareholders' Equity

Shareholders' Equity is shareholders' contributions (to purchase shares) +/- Retained Earnings (accumulated profit or loss to date - accumulated dividends paid).

So the difference you are seeing is shareholders' contributions.


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## zinfit (Mar 21, 2021)

If you are investing in growth stocks many have no earnings or negative earnings. Why? the successful ones are reinvesting everything back into their growth and expansion. Amazon would be the textbook model for this. It is only recently that it has started to show a profit as it becomes a mature operation. At different times this was the case with Google, Facebook, Nvidia, Shopify, Salesforce and many other such stocks. If you had avoided investing in this type of stock because they didn't show earnings you were missing out on some giant sized returns .


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