What are Unappropriated Retained Earnings?

Unappropriated retained earnings are those retained profits of a business that have not been set aside for a specific purpose. These funds may be directed wherever they are needed, such as for funding the purchase of fixed assets, funding increases in working capital, or making dividend distributions to shareholders. In most organizations, no part of retained earnings is set aside. This means that all of retained earnings is considered to be unappropriated.

Investors like to calculate the amount of unappropriated retained earnings in order to determine the maximum amount of funds that are available for distribution as dividends. They can then use this information to pressure the board of directors to issue larger dividends.