“Current Year Earnings” is the same as Retained Earnings, but it is from January 1 of the year you are in. This number that appears in the Equity section of your Balance Sheet should match up with the year-to-date net income number on your latest month’s Income Statement.
Assets – Liabilities = Owners Equity
The Equity section of your Balance Sheet is telling you where the equity came from. Under Current Year Earnings, it is saying “This much of the equity in the company is from profits we made this year.” Under Retained Earnings, it is saying “This much of the equity is from profits we made before this year, that are still there because the owners have not withdrawn it.”
That’s the subject of the next line – “Distribution to Shareholder.”
More tomorrow!
Wow! Found a new favorite track on Invictus….. track 9 “ Invictus “
I’m listening and I hear you Larry! Thank You for a great CD!