{"ok":true,"canonical_url":"https://dealroom.so/glossary/retained-earnings","api_url":"https://dealroom.so/api/public/glossary/retained-earnings","data_freshness":{"sba_records_through":"2026-05-31","fdic_records_through":"2026-03-31","dealroom_last_updated":"2026-06-15","timezone":"America/Chicago"},"source_summary":["Public SBA 7(a) loan records","FDIC institution data","DealRoom lender and franchise enrichment"],"term":{"slug":"retained-earnings","term":"Retained earnings","group":"Reading the business","definition":"The cumulative profits a business has kept rather than distributed to shareholders as dividends. It represents capital reinvested in the business, building its equity.","what_it_means":"On the balance sheet, retained earnings show how much profit the business has accumulated over time. While primarily an accounting figure, it reflects a history of profitability and financial strength. It's part of understanding the overall health and equity position of the business you're buying.","url":"https://dealroom.so/glossary/retained-earnings","official_sources":[],"related":[{"slug":"balance-sheet","term":"Balance Sheet","url":"https://dealroom.so/glossary/balance-sheet"},{"slug":"profit-and-loss-statement","term":"Profit and Loss Statement","url":"https://dealroom.so/glossary/profit-and-loss-statement"},{"slug":"equity-injection","term":"Equity injection","url":"https://dealroom.so/glossary/equity-injection"},{"slug":"cash-flow","term":"Cash flow","url":"https://dealroom.so/glossary/cash-flow"}],"related_questions":[{"question":"Can a business's retained earnings count as equity injection?","url":"https://dealroom.so/sba-loans/basics/can-a-business-s-retained-earnings-count-as-equity-injection"},{"question":"Can I use my business's retained earnings from a prior venture as equity injection?","url":"https://dealroom.so/sba-7a/questions/can-i-use-my-business-s-retained-earnings-from-a-prior-venture-as-equity-injection"},{"question":"How does the SBA view a seller's retained ownership after an acquisition?","url":"https://dealroom.so/sba-loans/basics/how-does-the-sba-view-a-seller-s-retained-ownership-after-an-acquisition"},{"question":"How does the SBA handle a seller's retained ownership in a change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-handle-a-seller-s-retained-ownership-in-a-change-of-ownership-transaction"},{"question":"How does the SBA handle a seller's retained ownership in a 7(a) change-of-ownership transaction?","url":"https://dealroom.so/for-lenders/questions/how-does-the-sba-handle-a-seller-s-retained-ownership-in-a-7-a-change-of-ownership-transac"},{"question":"If the seller holds a minority stake (e.g., 5%) after the acquisition, does their retained equity count towards my 10% injection?","url":"https://dealroom.so/sba-7a/questions/if-the-seller-holds-a-minority-stake-e-g-5-after-the-acquisition-does-their-retained-equit"}]},"caveats":["Definitions represent DealRoom's plain-English interpretation for buyers; verify regulatory terms against the official SBA and eCFR sources listed.","Not legal, tax, or financial advice, and not an SBA eligibility determination."],"citation":{"label":"DealRoom.so Glossary — Retained earnings","url":"https://dealroom.so/glossary/retained-earnings","source_type":"DealRoom Data"}}