what are retained earnings 
retained earnings provide an ongoing picture of how much profit a company has been able to maintain without depletion retained earnings can increase or decrease over time based on dividend payouts and earnings they re effectively how much of its income a company has managed to save the basic calculation equation is current retained earnings profit loss dividends 5the bottom linelarge recurring inventory write offs can indicate that a company has poor inventory management the company may be purchasing excessive or duplicate inventory because it s lost track of certain items or it s using existing inventory inefficiently companies that don t want to admit to such problems may resort to dishonest techniques to reduce the apparent size of the obsolete or unusable inventory these tactics can constitute inventory fraud 