Relationship between the net income and the flow to shareholders
Is there any relationship between the net income and the flow to shareholders?
Net income is the portion of a company’s revenues that remains after it pays all expenses. Owner’s equity is the difference between the company’s assets and liabilities. It is the shareholders share of the proceeds if you were to liquidate the company today. The relationship between net income and shareholders equity is through retained earnings, which is a balance sheet account that accumulates net income.
