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    Figuring out profitability from balance sheet

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    When examining the balance sheet, a company can tell their permanent accounts (sometimes referred to as "real" accounts) and the balances present. However, a company cannot tell their temporary account (sometimes referred to as "nominal" accounts) balances nor activity. There is a way to determine if the company has been profitable or not by examining the balance sheet.

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    https://brainmass.com/business/balance-sheet/determining-profitability-balance-sheet-465718

    Solution Preview

    Yes, there is a way to see if the company has been profitable or not by examining the balance sheet. The accumulated profits since inceptions, less any dividends declared, are reporting in the Retained Earnings account in the equity ...

    Solution Summary

    Two paragraphs plus an account analysis that illustrates how this is done.

    $2.19

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