Typically,the Statement of Stockholders' Equity Starts with Total Stockholders' Equity

Typically,the statement of stockholders' equity starts with total stockholders' equity at the beginning of the year,adds net income,subtracts dividends paid,and ends with total stockholders' equity at the end of the year.Over time,a profitable company will have earnings in excess of the dividends it pays out,resulting in a substantial amount of retained earnings shown on the balance sheet.