The Retained Earnings Statement primarily shows?

The Retained Earnings Statement primarily shows changes in owners' equity. This financial statement outlines how retained earnings, which are the accumulated profits not distributed as dividends, have changed over a specific reporting period. It typically begins with the previous period's retained earnings, adds net income (or subtracts net loss) from the current period, and then deducts any dividends declared.

This process reflects how the company's profits have been retained or distributed, providing valuable insights into the company's financial policy regarding profit retention versus payout to shareholders. While net income does play a role in the calculation of retained earnings, the statement itself encompasses a broader scope by detailing the overall movement in owners' equity as a result of multiple factors, including net income and dividends paid. Therefore, it effectively presents the changes that impact the equity stake of the owners over time.