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April 24, 2026 • Rohitashva
Simple Steps to learn Accounting for Balance Sheet Preparation
Retained earnings refer to the portion of a company’s net income that is not paid out as dividends but is instead retained for reinvestment in the business. Retained earnings can be thought of as the cumulative profits that a company has earned over time and has chosen to keep within the business.
The accounting equation is Assets = Liabilities + Equity. Retained earnings are a component of the equity section of the equation. The calculation of retained earnings through the accounting equation can be expressed as:
Retained earnings = Beginning retained earnings + Net income – Dividends
Here, beginning retained earnings represent the balance of the retained earnings account at the start of the accounting period. Net income refers to the company’s profit after all expenses and taxes have been deducted. Dividends refer to the portion of net income that has been paid out to shareholders as dividends.
For example, let’s assume that a company had beginning retained earnings of $100,000, net income of $50,000, and paid out $10,000 in dividends during the accounting period. The calculation of retained earnings would be:
Rohitashva Singhvi is a finance professional, entrepreneur, and digital creator based in Abu Dhabi, United Arab Emirates. With strong expertise in accounting, taxation, and financial compliance, he specializes in UAE VAT, Corporate Tax, financial reporting, and business advisory services. He has hands-on experience working with diverse industries, particularly in automotive services, contracting, and commercial enterprises.
Beyond finance, Rohitashva is the founder and driving force behind multiple digital platforms under the Singhvi Online brand, where he focuses on creating high-value content related to finance, business growth, taxation, and digital opportunities. His work aims to simplify complex financial concepts into clear, practical knowledge that helps businesses and individuals make confident financial decisions.
He combines traditional financial discipline with modern digital innovation, leveraging technology, automation, and strategic thinking to build scalable business systems. His mission is to empower businesses with financial clarity, compliance confidence, and long-term growth strategies.
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