What indicates a corporation's retained earnings?

A corporation's retained earnings represent the accumulative profits that have been generated by the company and are not distributed to shareholders as dividends. This figure reflects the portion of net income that is reinvested in the business for growth, debt repayment, or other corporate purposes, rather than being paid out to stockholders.

Retained earnings are calculated as the beginning retained earnings balance, adjusted for net income or loss in the current period, and then reduced by any dividends paid. This dynamic showcases the corporation's ability to grow its equity base over time, signifying retained profits that can be utilized for future investments or to strengthen the financial position of the company.

Thus, option C accurately captures this aspect of corporate finance by highlighting the importance of profits not distributed as dividends in contributing to the retained earnings balance.