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I am looking at a company's 10-k filing history for my valuation. I have collected figures for retained earnings, net income and dividend payments.

I would expect:

retained earnings(y2) = retained earnings(y1) + Net income(y2) - Dividends(y2)

However this is off by a about a million (or 5%). Does anyone have any accounting insights on why this might be off??

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  • $\begingroup$ If RE(y2) lower than expected there could have been an "impairment", i.e reduction in asset value. $\endgroup$ – Alex C Nov 24 '16 at 21:18
  • $\begingroup$ Acquisitions can also mess things up. $\endgroup$ – Alex C Nov 24 '16 at 22:27
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    $\begingroup$ Thanks for this. I'm thinking it might also be stock buybacks, that brings the number a lot closer. Close enough for now $\endgroup$ – Matthias Nov 24 '16 at 23:00

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