Switch to:
AutoZone Inc (NYSE:AZO)
Retained Earnings
$-2,188 Mil (As of Feb. 2014)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. AutoZone Inc's retained earnings for the quarter that ended in Feb. 2014 was $-2,188 Mil.

AutoZone Inc's quarterly retained earnings increased from Aug. 2013 ($-1,379 Mil) to Nov. 2013 ($-1,161 Mil) but then declined from Nov. 2013 ($-1,161 Mil) to Feb. 2014 ($-2,188 Mil).

AutoZone Inc's annual retained earnings declined from Aug. 2011 ($-644 Mil) to Aug. 2012 ($-1,033 Mil) and declined from Aug. 2012 ($-1,033 Mil) to Aug. 2013 ($-1,379 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.

AutoZone Inc Annual Data

Aug04Aug05Aug06Aug07Aug08Aug09Aug10Aug11Aug12Aug13
Retained Earnings 580370559546206137-245-644-1,033-1,379

AutoZone Inc Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Retained Earnings -453-1,606-1,357-1,033-830-2,016-1,750-1,379-1,161-2,188
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Hide