are retained earnings the same as profits 
the main difference between retained earnings and profits is that retained earnings subtract dividend payments from a company s profit whereas profits do not where profits may indicate that a company has positive net income retained earnings may show that a company has a net loss depending on the amount of dividends it paid out to shareholders the bottom lineretained earnings represent the profit a company has saved over time and therefore the portion that can be used to reinvest in the business in new equipment r d or marketing among others or distributed to shareholders they are a measure of a company s financial health and they can promote stability and growth 