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Education Management Corp  (OTCPK:EDMC) Retained Earnings: $-1,762 Mil (As of Jun. 2014)

Retained earnings is the accumulated portion of net income that is not distributed to shareholders. Education Management Corp's retained earnings for the quarter that ended in Jun. 2014 was $-1,762 Mil.

Education Management Corp's quarterly retained earnings declined from Dec. 2013 ($-1,212 Mil) to Mar. 20 ($-1,574 Mil) and declined from Mar. 20 ($-1,574 Mil) to Jun. 2014 ($-1,762 Mil).

Education Management Corp's annual retained earnings declined from Jun. 2012 ($-936 Mil) to Jun. 2013 ($-1,098 Mil) and declined from Jun. 2013 ($-1,098 Mil) to Jun. 2014 ($-1,762 Mil).


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Education Management Corp Annual Data

Jun05 Jun06 Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14
Retained Earnings Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 350.27 579.78 -935.96 -1,098.18 -1,762.10

Education Management Corp Quarterly Data

Sep09 Dec09 Mar10 Jun10 Sep10 Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14
Retained Earnings Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -1,098.18 -1,213.45 -1,212.36 -1,574.25 -1,762.10

Calculation

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.


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