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Adobe Systems Inc (NAS:ADBE)
Retained Earnings
$6,909 Mil (As of Nov. 2014)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. Adobe Systems Inc's retained earnings for the quarter that ended in Nov. 2014 was $6,909 Mil.

Adobe Systems Inc's quarterly retained earnings increased from May. 2014 ($6,806 Mil) to Aug. 2014 ($6,851 Mil) and increased from Aug. 2014 ($6,851 Mil) to Nov. 2014 ($6,909 Mil).

Adobe Systems Inc's annual retained earnings declined from Nov. 2012 ($7,003 Mil) to Nov. 2013 ($6,929 Mil) and declined from Nov. 2013 ($6,929 Mil) to Nov. 2014 ($6,909 Mil).


Definition

Retained Earnings is the accumulated portion of net income that is not distributed to shareholders. Because the net income was not distributed to shareholders, shareholders’ equity is increased by the same amount.

Of course, if a company loses, it is called retained losses, or accumulated losses.


Explanation

Historically profitable companies sometimes have negative retained earnings. This is because they have cumulatively paid out more to shareholders than they reported in profits.

For example, in 2011, Microsoft had negative retained earnings. This does not mean the company lost more money than it made over the years. It just means it paid out more money than it earned.

If a company has negative retained earnings, investors should check the 10-year financial results. They should not assume that negative retained earnings prove a company has generally lost money in the past.

Of course, many companies with negative retained earnings have indeed lost money in the past.

Retained Earnings: Warren Buffett’s Secret.

One of the most important indicators of durable competitive advantage. Net earnings can be paid out as dividends, used to buy back shares or retained for growth.

If the company loses more than it has accumulated, retained earnings is negative.

If a company isn’t adding to its retained earnings, it isn’t growing its net worth.

Rate of growth of retained earnings is good indicator whether it’s benefiting from a competitive advantage.

Microsoft is negative because it chose to buyback stock and pay dividends.

The more earnings retained, the faster it grows and increases growth rate for future earnings.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Adobe Systems Inc Annual Data

Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13Nov14
Retained Earnings 2,8393,3184,0424,9135,3005,9816,5297,0036,9296,909

Adobe Systems Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
Retained Earnings 6,8157,0036,8086,8556,8786,9296,7356,8066,8516,909
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