Does all net income that doesn’t get paid out as a dividend add to a company’s equity?

I used to think that 100% of a company’s net income would either get paid out as dividends or add to a company’s retained earnings but I’ve realized that, in a lot of cases, some of a company’s net income just seems to disappear. Where does this additional net income go?

Would paying off debt with the proceeds of net income be an explanation for this? If a company chose to pay off some of their long term debt with their net income, that wouldn’t necessarily add to the company’s equity, correct? Or am I just misreading this -- would 100% of a company's net income that isn't paid out as dividends, in fact, add to their retained earnings?

Submitted December 27, 2017 at 03:22AM by traderlmd http://ift.tt/2BK04Md