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Glossary · PSX term

Retained earnings.

Retained earnings are the cumulative profits a company keeps rather than paying out as dividends.

Definition

Held on the balance sheet within equity, they fund growth, debt repayment, or future buybacks and dividends. Rising retained earnings can build book value over time.

Worked example

A company earning Rs. 10 billion and paying Rs. 4 billion in dividends retains Rs. 6 billion as retained earnings.

Related on PSX Clarity

Dividend policy

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