What is the difference between retained earnings and net income?

Answer 1

Netincomegenerally represents the company's profit after all expenses, including financial expenses, have been paid. This number is often called the "bottom line" and is generally the figure people refer to when they use the word "profit" or "earnings."

Retainedearningsrepresent the total profits the company has earned since it began, minus whatever has been paid to shareholders as dividends. Since this is a cumulative number, if a company has lost money over time, retainedearningscan be negative and would be renamed "accumulated deficit."