what are the limitations of retained earnings 
for an analyst the absolute figure of retained earnings during a particular quarter or year may not provide any meaningful insight observing it over a period of time for example over five years only indicates the trend of how much money a company is adding to retained earnings as an investor one would like to know much more such as the returns that the retained earnings have generated and if they were better than any alternative investments additionally investors may prefer to see larger dividends rather than significant annual increases to retained earnings 