Question

If a company has had negative earnings for several periods they might choose to use a _____ .

A) Stock split
B) Dividend payout
C) Retained earnings statement
D) Reverse stock split

Answer 1

If a company has had negative earnings for several periods, they might choose to use a retained earnings statement. It reflects the net income or net loss of the company from previous periods that are retained for future use. Using a retained earnings statement helps the company showcase its financial situation to stakeholders.

Step-by-step explanation:

If a company has had negative earnings for several periods, they might choose to use a retained earnings statement. A retained earnings statement is a financial statement that shows the changes in a company's retained earnings over a specific accounting period.

It reflects the net income or net loss of the company from previous periods that are retained for future use. By using a retained earnings statement, the company can account for its negative earnings and showcase a clear picture of its financial situation to its stakeholders.