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Which do you believe to be more important, the statement of stockholders’ equity or the statement...

Which do you believe to be more important, the statement of stockholders’ equity or the statement of retained earnings? Why?

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Answer #1

Statement of retained earnings shows how much of the net income has been distributed as dividends and how much of net income add to the retained earnings.

The Statement of shareholder's equity shows the effect of net income, dividends paid, change in accounting policy, dividends paid, issue and redemption of shares etc.

Thus the information provided by the statement of shareholders' equity is in more detailed compared to the statement of retained earnings.

Therefore statement of shareholders' equity is more important than the statement of retained earnings.

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