Answer :
Final answer:
The Statement of Retained Earnings shows how a company's profits are retained and reinvested for future growth.
Explanation:
Statement of Retained Earnings shows how much money a company made that was retained and reinvested in the company. It summarizes the changes in retained earnings over a specific period, usually a year.
Retained earnings are the profits retained by a company for reinvestment and not distributed as dividends. They represent the portion of net income that has not been paid out as dividends but instead reinvested into the business.
By analyzing the Statement of Retained Earnings, stakeholders can understand how much of the company's profits have been reinvested back into the business to support future growth and expansion.
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