what is retained earnings to market value 
one way to assess how successful a company is in using retained money is to look at a key factor called retained earnings to market value it is calculated over a period of time usually a couple of years and assesses the change in stock price against the net earnings retained by the company for example during the period from september 2016 through september 2020 apple inc s aapl stock price rose from around 28 to around 112 per share 4 during the same period the total earnings per share eps was 13 61 while the total dividend paid out by the company was 3 38 per share as the 2020 10 k form indicates apple had the following eps and dividend figures over the given time frame and summing them up gives the above values for total eps and total dividend 5the difference between total eps and total dividend gives the net earnings retained by the company 13 61 3 38 10 23 that is over the period the company retained a total of 10 23 earnings per share over the same duration its stock price rose by 84 112 28 per share dividing this price rise per share by net earnings retained per share gives a factor of 8 21 84 10 23 which indicates that for each dollar of retained earnings the company managed to create around 8 21 of market value if the company had not retained this money and instead taken an interest bearing loan the value generated would have been less due to the outgoing interest payment retained earnings offer internally generated capital to finance projects allowing for efficient value creation by profitable companies however note that the above calculation is indicative of the value created with respect to the use of retained earnings only and it does not indicate the overall value created by the company retained earnings examplecompanies publicly record retained earnings under the shareholders equity section on the balance sheet for instance apple s balance sheet from the third fiscal quarter fiscal q3 of 2019 shows that the company had retained earnings of 53 72 billion as of the end of the quarter in june 2019 6similarly the iphone maker whose fiscal year ends in september had 70 4 billion in retained earnings as of september 2018 6the retained earnings are calculated by adding net income to or subtracting net losses from the previous term s retained earnings and then subtracting any net dividend s paid to the shareholders 7the figure is calculated at the end of each accounting period monthly quarterly annually as the formula suggests retained earnings are dependent on the corresponding figure of the previous term the resultant number may be either positive or negative depending upon the net income or loss generated by the company over time alternatively the company paying large dividends that exceed the other figures can also lead to the retained earnings going negative any item that impacts net income or net loss will impact the retained earnings such items include sales revenue cost of goods sold cogs depreciation and necessary operating expenses 