What do we call cumulative profits that are retained in the business?

Retained earnings refer to the cumulative profits that a company has retained instead of distributing them as dividends to shareholders. This figure is an important component of a company's balance sheet and reflects the total amount of net income that has been reinvested in the business over time. This retention of earnings can be used for various business purposes, including reinvestment in operations, payment of debt, or saving for future expenses.

The concept of retained earnings enables a company to grow and fund its projects without needing to resort to outside financing. It showcases the company's ability to generate profit and manage its earnings effectively, demonstrating financial health and sustainability.

In contrast, capital gains refer to the profit from the sale of assets or investments, while net profit is the amount remaining after all expenses have been deducted from revenues during a specific period. Gross earnings generally represent total revenues before any expenses are subtracted. Each of these terms captures different aspects of a company's financial performance but does not specifically indicate profits retained within the business in the way that retained earnings do.