Quick Answer The Residual Dividend Model (RDM) is a financial strategy where companies distribute dividends only from…
Retained Earnings
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**Retained Earnings**
Retained earnings refer to the portion of a company’s net profit that is kept or reinvested in the business instead of being distributed to shareholders as dividends. These earnings are accumulated over time and used for various purposes such as funding operations, paying off debt, or investing in growth opportunities. Understanding retained earnings is crucial for assessing a company’s financial health and its ability to generate future profits.