Finance School of management The Income statement It is important to remember Retained earnings are not added to the cash balance of the firm but are added to shareholders equit Accounts show historical values. not market values uesTc 1010 Finance School of Management ❖ It is important to remember – Retained earnings are not added to the cash balance of the firm, but are added to shareholder’s equity. – Accounts show historical values, not market values. The Income Statement