Deliberate earnings may have a variety of impacts on the shareholders. When wisely reinvested, they might result in enhanced income and later improvement in share values. In other cases where the earning is not sufficient to give good returns and dividends, the shareholders might doubt the management strategy. Retained earnings are also used on the balance sheet to assist in determining the book value of the company; retained earnings have the potential of affecting valuation measurements. The broad trends in retained earnings are often used by investors to compare the effective use of profits by a company in attempting to grow or just cash-hoarding.

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