The two free Excel templates below cover two different needs. The first is a simple one-period statement for a monthly, quarterly or annual close. The second is a five-period roll-forward that makes it easier to compare changes over time because each new period begins with the previous period’s ending retained earnings.

Download the Retained Earnings Statement Templates

1. Simple Statement of Retained Earnings Template

Use this spreadsheet when you need a straightforward retained earnings reconciliation for one reporting period. The worksheet separates the opening balance, net income or loss, dividends or distributions, adjustments and ending balance. A notes/source column helps document where each figure came from, while the ending balance is formula-driven.

2. Multi-Period Retained Earnings Roll-Forward Template

This version is useful when you want to see the retained earnings movement across several years or reporting periods on one sheet. The beginning balance for each new column links to the previous period’s ending balance, which reduces repetitive data entry and makes breaks in the roll-forward easier to spot.

What Does a Statement of Retained Earnings Show?

Retained earnings represent accumulated profits kept in the business after considering prior losses and distributions to owners or shareholders. The statement does not measure cash on hand. Instead, it reconciles one equity balance from the start of a period to the end of that period.

This makes the statement a useful bridge between performance reported on the income statement and the retained earnings balance presented within equity on the balance sheet or broader financial statements.

Retained Earnings Formula

A common roll-forward can be expressed as:

Beginning Retained Earnings + Net Income − Dividends or Distributions ± Supported Adjustments = Ending Retained Earnings

If the business reports a net loss, enter the loss as a negative amount so it reduces retained earnings. Likewise, an adjustment should not be used simply to force the statement to balance. Any adjustment should have a clear accounting basis and supporting documentation.

Worked Example

Assume a company starts the year with retained earnings of $50,000. During the year it earns $18,000 of net income and declares $6,000 of dividends. With no other adjustments, the calculation is:

The ending $62,000 should then agree with the retained earnings figure used in the related period-end equity presentation, subject to the reporting framework and entity structure.

How the Excel Templates Work

The simple workbook is designed as a close-support worksheet rather than a decorative financial report. Enter the beginning balance, current-period net income or loss, dividends or distributions and any approved adjustment. The ending balance calculates automatically. The notes column can be used for source references such as “prior-year balance sheet,” “income statement,” “board dividend approval” or “journal entry JE-104.”

The multi-period workbook follows the same logic horizontally. Once one period is complete, the next period can begin with the previous ending amount. This makes the sheet useful for trend review, bookkeeping cleanup, audit preparation or internal financial-statement support.

Where Should the Numbers Come From?

• Beginning retained earnings: normally the ending retained earnings balance from the previous reporting period after approved closing entries and prior-period corrections.
• Net income or loss: should agree with the final income statement for the same period.
• Dividends or distributions: use the amounts that are properly authorized and recorded for the entity.
• Adjustments: enter only supported accounting adjustments that legitimately affect retained earnings under the reporting framework being used.

Do not use estimates simply because the expected ending balance is known. A reconciliation is valuable precisely because each movement can be traced to another record.

Retained Earnings Is Not the Same as Cash

A company can have positive retained earnings and still have limited cash, or it can hold substantial cash while retained earnings are negative. Retained earnings are an equity measure built from accumulated results and distributions; cash is an asset balance affected by operating, investing and financing activity.

This distinction is one reason the statement should be read alongside the cash flow statement, income statement and balance sheet rather than as a stand-alone measure of financial health.

When a Broader Statement of Changes in Equity May Be Better

A retained earnings statement is convenient when retained earnings are the main equity movement you need to explain. More complex entities may need a broader statement of changes in equity or shareholders’ equity that also tracks share capital, additional paid-in capital, reserves, treasury shares, other comprehensive income or other equity components.

The correct presentation depends on the entity, transactions, financial-reporting framework and purpose of the statements. For formal external reporting, have the final presentation reviewed against the accounting standards and legal requirements that apply to the organization.

Reconciliation Checks Before You Finalize the Statement

1. Confirm that the beginning retained earnings balance agrees with the prior period’s approved ending balance.
2. Tie net income or loss to the final income statement, not an earlier draft.
3. Check dividends or distributions against the supporting approvals and ledger entries.
4. Review every adjustment and keep its journal entry or supporting explanation.
5. Confirm that ending retained earnings agrees with the amount used in the balance sheet or broader equity statement.
6. Use the same reporting period, currency and sign convention across the related financial statements.

Using the Template with Other Financial Statements

Retained earnings is only one part of a complete reporting package. If you are preparing financial statements from source records, it is often useful to complete the profit and loss statement or income statement first, because current-period profit or loss feeds into the retained earnings calculation. The ending retained earnings balance can then be incorporated into the relevant equity section.

For a broader overview of common reports and formats, see the site’s Financial Statement Templates.

Frequently Asked Questions

Can retained earnings be negative?

Yes. Accumulated losses or distributions can result in a negative retained earnings balance. The terminology and presentation may vary, so the balance should be interpreted with the rest of the financial statements.

How often should a retained earnings statement be prepared?

It can be prepared whenever the organization closes a reporting period—monthly, quarterly or annually—if the statement is useful for the entity’s accounting process or reporting requirements.

Are dividends an expense on the income statement?

Dividends are generally treated as distributions of equity rather than operating expenses. They reduce retained earnings in the equity reconciliation rather than being deducted to calculate operating profit.

Can a small business use this template?

Yes, provided retained earnings is appropriate for the entity’s accounting structure. Sole proprietorships and some other entity types may use owner’s equity or capital-account terminology instead, so labels should be adapted to the actual accounting records.

Will the Excel formulas calculate automatically?

Yes. The ending retained earnings cells contain formulas, and the multi-period version also links each new period’s beginning balance to the preceding period’s ending balance. Check formulas after inserting rows or changing the layout.

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