Switch to:
McCormick & Company Inc (NYSE:MKC)
Retained Earnings
$969 Mil (As of May. 2014)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. McCormick & Company Inc's retained earnings for the quarter that ended in May. 2014 was $969 Mil.

McCormick & Company Inc's quarterly retained earnings increased from Nov. 2013 ($970 Mil) to Feb. 2014 ($993 Mil) but then declined from Feb. 2014 ($993 Mil) to May. 2014 ($969 Mil).

McCormick & Company Inc's annual retained earnings increased from Nov. 2011 ($839 Mil) to Nov. 2012 ($935 Mil) and increased from Nov. 2012 ($935 Mil) to Nov. 2013 ($970 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.

McCormick & Company Inc Annual Data

Nov04Nov05Nov06Nov07Nov08Nov09Nov10Nov11Nov12Nov13
Retained Earnings 434385349324425592701839935970

McCormick & Company Inc Quarterly Data

Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14May14
Retained Earnings 8698869109359489531,012970993969
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
Email Hide