Enter the retained earnings ($) and the percentage of capital in equity (%) into the Retained Earnings Breakpoint Calculator. The calculator will evaluate the Retained Earnings Breakpoint. 

Retained Earnings Breakpoint Formula

The following two example problems outline the steps and information needed to calculate the Retained Earnings Breakpoint.

REB = RE / (We/100)

Variables:

  • REB is the Retained Earnings Breakpoint ($)
  • RE is the retained earnings ($) 
  • We is the percentage of capital in equity (%) 

To calculate the retained earnings breakpoint, divide the retained earnings by the ratio of capital in equity.

How to Calculate Retained Earnings Breakpoint?

The following steps outline how to calculate the Retained Earnings Breakpoint.

  1. First, determine the retained earnings ($). 
  2. Next, determine the percentage of capital in equity (%). 
  3. Next, gather the formula from above = REB = RE / (We/100).
  4. Finally, calculate the Retained Earnings Breakpoint.
  5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

retained earnings ($) = 300,000,000

percentage of capital in equity (%) = 50

REB = RE / (We/100) = ?