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Toro Co (NYSE:TTC)
Retained Earnings
$379 Mil (As of Jan. 2015)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. Toro Co's retained earnings for the quarter that ended in Jan. 2015 was $379 Mil.

Toro Co's quarterly retained earnings increased from Jul. 2014 ($368 Mil) to Oct. 2014 ($369 Mil) and increased from Oct. 2014 ($369 Mil) to Jan. 2015 ($379 Mil).

Toro Co's annual retained earnings increased from Oct. 2012 ($264 Mil) to Oct. 2013 ($315 Mil) and increased from Oct. 2013 ($315 Mil) to Oct. 2014 ($369 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.

Toro Co Annual Data

Oct05Oct06Oct07Oct08Oct09Oct10Oct11Oct12Oct13Oct14
Retained Earnings 360359335338291253214264315369

Toro Co Quarterly Data

Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14Oct14Jan15
Retained Earnings 264264324336315298340368369379
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