Customer Quote by Mike Piper
““The statement of retained earnings acts as a bridge between the income statement and the balance sheet. It takes information from the income statement, and it provides information to the balance sheet.””
About This Quote
Source Book: Accounting Basics, 2019
Retained earnings link the income statement to the balance sheet, transferring profit information.
In simple terms: Retained earnings connect profit data between statements.
Use retained earnings to understand financial health.
Themes
Mood
Type
When to use this quote
- business analysis
- financial reporting
- investment decisions
Key Concepts
Questions to Reflect On
- How do retained earnings affect cash flow?
- What does a change in retained earnings indicate?
Misinterpretation can lead to poor financial decisions.