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Spireframe Software, makers of Value Investor - the easiest way to learn stock analysis and valuation of stocks. Spireframe Software, makers of Value Investor - the easiest way to learn stock analysis and valuation of stocks.  
Retained Earnings to Stockholder's Equity
Retained Earnings
Retained Earnings to Stockholder's Equity =
 Total Stockholder's Equity 

Explanation of Retained Earnings to Stockholder's Equity:

The Retained Earnings to Stockholder's Equity ratio measures how much Retained Earnings the company is keeping within the company compared to the total equity.

Importance of Retained Earnings to Stockholder's Equity:

An excessively low, or decreasing Retained Earnings to Stockholder's Equity ratio is generally negative, possibly indicating the company is paying out increasingly more earnings to stockholders instead of reinvesting the money in the company.  This ratio will need to be compared to industry averages, as an excessively high ratio may be negative as well, meaning the company may be retaining more earnings than it needs.

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