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What is ploughing back of profit …

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What is ploughing back of profit as a source of finance gives any two benifit of it and explain it

    • Posted by Dolly ?️ 5 years, 10 months ago

    CBSE > Class 11 > Business Studies
    • 1 answers

    Gaurav Seth 5 years, 10 months ago

    It refers to the process of retaining a part of the company's net profits for the purpose of reinvesting in the business itself. In other words, the savings generated internally by a company in the form of 'retained earnings' are ploughed back into the company for diversification of its business. It is actually the amount held back by the entrepreneur after paying a reasonable dividend to the shareholders of the company and these undistributed profits are used by the company to meet its present and future financial requirements.

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