Using Retained Earnings Advantageously

Robert Powell

In his most recent letter to shareholders, Warren Buffett, the chairman of Berkshire Hathaway, discussed how "Charlie (Munger) and I have long focused on using retained earnings advantageously."

Retained earnings, according to our friends at Investopedia, "is the amount of net income left over for the business after it has paid out dividends to its shareholders. A business generates earnings that can be positive (profits) or negative (losses).

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