Retained earnings are classified under which part of a company's financial statement?

Retained earnings are classified under the equity section of a company's financial statement because they represent the portion of net income that is retained in the company rather than distributed to shareholders as dividends. This reflects the cumulative amount of profits that have been reinvested in the business over time and contribute to the overall net worth of the company.

Retained earnings are an important component of shareholders' equity, which also includes items such as common stock and additional paid-in capital. By being part of equity, retained earnings provide insights into the company's financial health, showing how much profit has been retained to fuel growth and operations.

In contrast, assets reflect what the company owns, liabilities represent what the company owes, and revenue pertains to the income generated from normal business operations, so they don't accurately describe the nature of retained earnings.