Retained Cash Flow - RCP

  

Categories: Accounting

You had profits. Your company generated cash or had positive cash flow. And you kept it. Like water in your thighs after a salty meal. See: Retained Earnings.

When companies retain their cash flow, that's a good thing, usually. It means that they don't need to spend for competitive reasons, for upgrading their tractor smelters or building new whatevers. They just let the cash build up in the bank.

The ultimate retained cash flow story? Apple: $150 billion in cash, essentially no debt, and building. iPhone sales must've been an incredibly salty meal.

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Finance: What are retained earnings?26 Views

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Finance allah shmoop what are retained earnings You know when

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you eat really salty food and the next day you

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have cankles it's all that water desperately trying Teo get

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youto wiz out the loads of sodium chloride in your

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body That's retained water well retained earnings and i'll sort

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of work the same way you run a plastic cup

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stamping business with catchy little phrases on the cubs Last

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year you had a million bucks in sales and one

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hundred grand in after tax earnings About eighty grand of

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that earnings was in fact cash Why didn't you retain

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in cash one hundred percent of your earnings What happened

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to the twenty grand in cash there How did evaporate

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Well you had to spend cash out of your earnings

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on a cup plunging machine and then cost real cash

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dough You'll amber ties that cost over time now and

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get essentially a tax break because of it meaning you'll

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show lesson earning so you'll pay less in taxes but

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the cash won't change So this year's hundred grand was

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a nice year but last year you had fifty grand

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in cash profits and you had twenty grand in cash

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Profits the year before then and before then you had

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run it just cash flow break even for the previous

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five years So it all looked like that So in

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total you saved Or rather you retained cash earnings of

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eighty plus fifty plus twenty or a sum total of

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one hundred fifty grand That all now sits in your

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b of a account doing a whole lot of nothing

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of intern two percent a year for the privilege that

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one hundred fifty grand that you have cumulatively retained Like

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ankle's swelling is retained earnings which you will now use

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to print more catchy titles in foreign languages Maybe don't

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look up What those mean All right let's close the 00:01:49.043 --> [endTime] video now

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