Which financial statement outlines changes in retained earnings for a company over a specified period?

The financial statement that outlines changes in retained earnings for a company over a specified period is the Statement of Retained Earnings. This statement is specifically designed to detail how the retained earnings, which represent the cumulative amount of profits that have been retained in the company rather than distributed as dividends, have changed over the reporting period.

The Statement of Retained Earnings typically includes the beginning balance of retained earnings, any additions such as net income from the Income Statement, and deductions like dividends declared and paid. By summarizing these elements, the statement provides a clear view of the factors affecting retained earnings, which is crucial for stakeholders to understand how profits are being utilized or reinvested in the business.

Unlike other financial statements, such as the Balance Sheet, which provides a snapshot of assets, liabilities, and equity at a specific point in time, or the Income Statement, which summarizes revenues and expenses to show profitability for a period, the Statement of Retained Earnings focuses specifically on the changes in retained earnings over time. Similarly, the Statement of Cash Flows highlights cash inflows and outflows but does not specifically address retained earnings. Therefore, the Statement of Retained Earnings is the appropriate and dedicated document for this purpose.