Final answer:
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.