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surplus

noun
sur·​plus | \ ˈsər-(ˌ)pləs How to pronounce surplus (audio) \

Definition of surplus

 (Entry 1 of 2)

1a : the amount that remains when use or need is satisfied
b : an excess of receipts over disbursements
2 : the excess of a corporation's net worth over the par or stated value of its stock

surplus

adjective

Definition of surplus (Entry 2 of 2)

: more than the amount that is needed : constituting a surplus surplus food/clothing/equipment When the sea captains returned, they would sell their surplus wares on the wharves.— Carol Vogel Long before the comparable worth battles of today, the economic value of women's work was evident to farm women who set prices for the surplus butter, candles, soap, honey, preserves, chickens, and eggs they raised or manufactured.— Mary Kay Blakely
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Examples of surplus in a Sentence

Noun

 If there is any surplus, it will be divided equally. There is a surplus of workers and not enough jobs.

Recent Examples on the Web: Noun

 Germany, which is running a surplus, is one such example. — Washington Post, "Brexit escalation raises alarm for ailing European economy," 29 Aug. 2019 Kuhn Schweitz said that making the trip from quarry to cement factory 20 times in one day produces a surplus of 200 kilowatt-hours of energy (or 77 megawatt-hours per year). — Courtney Linder, Popular Mechanics, "The World's Largest Electric Vehicle Is a Dump Truck," 21 Aug. 2019 California’s booming economy was felt earlier this year when Newsom signed a state spending plan that included an estimated $21.5 billion surplus, the largest in at least 20 years. — Adam Beam, SFChronicle.com, "California’s 113-month job growth ties1960s record," 16 Aug. 2019 Coddled by government, the automotive industry, which runs a larger trade surplus than any other export sector, has been slow to adjust to the rise of electric and autonomous cars. — The Economist, "Germany’s economy is now shrinking," 15 Aug. 2019 Cities are allowed to declare TIF surpluses, and Emanuel established a policy that gave money not committed to a specific project or program back to city and county taxing bodies, particularly CPS. — Juan Perez Jr., chicagotribune.com, "A controversial tax subsidy program will generate a record $1.2 billion in revenue. Here’s what the number means for Chicago.," 1 Aug. 2019 Beekeepers harvest the surplus, and with it, a portion of the wax comb. — Gemma Tarlach, Milwaukee Journal Sentinel, "Bounty of the bees extends far beyond honey for your tea - to lotions, balms and even drinks," 16 July 2019 Arkansas Little Rock: Finance officials say the state has ended the fiscal year with a $295 million budget surplus, nearly $74 million of which will go toward highway needs. — USA TODAY, "Robot hostesses, veggie booze, ‘civil death’: News from around our 50 states," 4 July 2019 The trick to a healthy late-night snack is to choose one that's filling enough to satisfy, but light enough to prevent a calorie surplus, which can lead to unwanted weight gain. — Cynthia Sass, Mph, Health.com, "7 Healthy Late-Night Snacks," 3 July 2019

Recent Examples on the Web: Adjective

 Despite a noticeable rise in nonrenewals in high-risk communities, insurers maintain that statistics from the FAIR Plan and surplus line carriers such as Lloyd’s of London don’t indicate a problem with insurance availability. — Los Angeles Times, "Column: California’s fire insurance market reaches a crisis," 29 Aug. 2019 Ventilation is also a closed loop, harvesting surplus heat from the LEDs while managing humidity and oxygen levels. — The Economist, "New ways to make vertical farming stack up," 29 Aug. 2019 The governor talked about the $2.7 billion for housing and homelessness assistance in this year’s state budget and new state programs to provide legal help for people being evicted and provide surplus state land for housing projects. — John Wildermuth, SFChronicle.com, "‘Small ball’ housing aid in SF: It’s better than nothing, Gavin Newsom says," 15 Aug. 2019 POWAY The Poway Unified School District board met Thursday and approved its revised 2019-2020 budget, and discussed possible requests for proposals to sell surplus property at the Black Mountain Ranch Southern Site. — Laura Groch, San Diego Union-Tribune, "How they voted, Aug. 11," 11 Aug. 2019 The Astros also avoided giving up either Forrest Whitley or Kyle Tucker, instead dealing away surplus prospects (Seth Beer and Derek Fisher) and volatile arms (Corbin Martin and J.B. Bukauskas). — Jon Tayler, SI.com, "MLB Trade Deadline Winners and Losers: What Happened to the Yankees and Dodgers?," 31 July 2019 According to city officials, the current animal shelter was built in 2008 with funds from surplus sales tax and was designed to house a total of 24 dogs and 35 cats to provide approximately 150 adoptions per year. — Kristi Nix, Houston Chronicle, "Sugar Land City Council approves $90.7 million bond election for Nov. 5 election," 16 Aug. 2019 Many local governments continue to organize tests of school lunches, part of a larger effort to engineer new meals out of surplus agricultural products. — Michael Waters, Smithsonian, "The Government Taste Testers Who Reshaped America’s Diet," 9 Aug. 2019 To address the housing crisis, government agencies need to build on surplus public property and streamline the permitting process for construction, according to experts at a state Assembly committee meeting held in San Diego last week. — Gary Warth, San Diego Union-Tribune, "State committee hears affordable housing plans in San Diego," 21 July 2019

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'surplus.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of surplus

Noun

14th century, in the meaning defined at sense 1a

Adjective

1589, in the meaning defined above

History and Etymology for surplus

Noun

Middle English, from Anglo-French, from Medieval Latin superplus, from Latin super- + plus more — more at plus

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More Definitions for surplus

earned surplus

noun

Financial Definition of earned surplus

What It Is

Earned surplus is the sum of a company's profits, after dividend payments, since the company's inception. It can also be called retained earnings, retained capital, or accumulated earnings.

How It Works

Let's look at an example to illustrate.

Assume Company XYZ has been in business for five years, and it has reported the following annual net income:

Year 1: $10,000

Year 2: $5,000

Year 3: -$5,000

Year 4: $1,000

Year 5: -$3,000

Assuming Company XYZ paid no dividends during this time, XYZ's earned surplus is the sum of its net profits since inception: $10,000 + $5,000 - $5,000 + $1,000 - $3,000 = $8,000.

In subsequent years, XYZ's earned surplus will change by the amount of each year's net income, less dividends.

The statement of earned surplus summarizes changes in earned surplus for a fiscal period, and total earned surplus appears in the shareholders' equity portion of the balance sheet. This means that every dollar of earned surplus is essentially another dollar of shareholders' equity.

A company's board of directors may "appropriate" some or all of the company's earned surplus when it wants to restrict dividend distributions to shareholders. Appropriations are usually done at the board's discretion, although bondholders may contractually require the board to do so. Appropriations appear as a special account in the earned surplus section. When an appropriation is no longer needed, it is transferred back to earned surplus. Because earned surplus is not cash, a company may fund appropriations by setting aside cash or marketable securities for the projects indicated in the appropriation.

Why It Matters

It is important to understand that earned surplus does not represent extra cash or cash left over after the payment of dividends. Rather, earned surplus demonstrates what a company did with its profits; they are the amount of profit the company has reinvested in the business since its inception. These reinvestments are either asset purchases or liability reductions.

Earned surplus somewhat reflects a company's dividend policy, because it reflects a company's decision to either reinvest profits or pay them out to shareholders. Ultimately, most analyses of earned surplus focuses on evaluating which action generated or would generate the highest return for the shareholders.

Most of these analyses involve comparing earned surplus per share to profit per share over a specific period, or they compare the amount of capital retained to the change in share price during that time. Both of these methods attempt to measure the return management generated on the profits it plowed back into the business. Look-through earnings, a method developed by Warren Buffett that accounts for taxes, is another method in this vein.

Capital-intensive industries and growing industries tend to retain more of their earnings than other industries because they require more asset investment just to operate. Also, because earned surplus represents the sum of profits less dividends since inception, older companies may report significantly higher earned surplus than identical younger ones.

This is why comparison of earned surplus is difficult but generally most meaningful among companies of the same age and within the same industry, and the definition of "high" or "low" earned surplus should be made within this context.

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