Final answer:
An investor would examine the statement of cash flows, income statement, statement of retained earnings, and balance sheet to assess the reasons for a change in retained earnings over a period of a year.
Step-by-step explanation:
To assess the reasons for a change in retained earnings over a period of a year, an investor would probably examine the statement of cash flows and the income statement, the statement of retained earnings, and the balance sheet. These financial statements provide information on the company's revenues, expenses, cash flows, and changes in equity, which all contribute to understanding the change in retained earnings. An investor who wishes to assess the reasons for a change in retained earnings over a period of a year would most likely examine the statement of retained earnings.
This financial statement directly reflects the changes in retained earnings, including profits that were reinvested into the company (by reinvesting profits), dividends paid to shareholders, and any adjustments due to corrections of errors from previous financial statements. It is this statement that shows the beginning balance of retained earnings, adds the net income or subtracts the net loss, and subtracts dividends paid out to show the ending balance of retained earnings. Additionally, the income statement plays a significant role, as it provides information on the profits and losses, which are key components affecting the retained earnings. The statement of cash flows could also be useful, providing insights into the overall cash position of the company, but it does not directly relate to the retained earnings figure.