Are retained earnings an asset or liability how to calculate owner's equity?

Retained earnings are neither an asset nor a liability; they are a component of owner's equity on the balance sheet. Owner's equity can be calculated by taking the total assets of a company and subtracting its total liabilities. This figure reflects the net worth of the business and includes retained earnings, contributed capital, and any other equity accounts. The formula can be summarized as: Owner's Equity = Total Assets - Total Liabilities.