You are studying with some classmates and one of them states the following: If a company has
Question:
You are studying with some classmates and one of them states the following:
“If a company has a large retained earnings balance, this signals that the corporation has been profitable in the past and has never suffered a loss. This retained earnings balance represents cash that management has set aside to finance the company in the future.”
Required
Identify any errors in your classmate’s statement and indicate how it could be substantively improved.
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Related Book For
Understanding Financial Accounting
ISBN: 9781119715474
3rd Canadian Edition
Authors: Christopher D. Burnley
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