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To plough back profits is to reinvest the profits into future business activities.
To plough back profits is the alternative to distributing profits. Distributing profits is done by paying shareholders dividends.
A company may decide to pay a proportion of profits as dividend and to reinvest (plough back) the remainder.
Wiki User
∙ 13y ago
Wiki User
∙ 12y agoPloughing back of profits
'Ploughing back of profits' is an important source of internal or self financing by a company. 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. This reduces their dependence on funds from external sources in order to finance their regular business needs. Such a source of finance may be used by the company for the following purposes:-
- For expansion and growth of the business
- For strengthening the financial position of the company
- For meeting various working capital requirements of the company
- For redemption of old debts
- For replacement of obsolete assets and modernisation.
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What are undistributed corporate profits called?
Undistributed corporate profits are also called IENR i.e. Income earned but nor receieved. These are the profits that shareholders may earn but will not receieve in their salary. Even I just read about it somewhere so I am guessing it is something like the deductions that are made in your salary apart from income tax.. Basically you earn that money on paper but you don't receieve it. A better explanation is welcomed
Accounting profits are typically?
greater then economic profits,as accounting profits do not include implicit costs
How do you calculate economic profits?
Profits = revenues - expenses
Which statements is true about profits in a monopolistically competitive market?
many firms will earn profits in the short term, but they must constantly innovate and compete to earn profits in the long term
Economic profits in an industry suggest the industry?
economic profits in a industry suggest the industry
What are the various sourceof finance?
IMPORTANT SOURCES OF FINANCE FOR BUSINESSShort term finance: bank credit, trade credit, instalment credit, customer advances.Medium term finance: issue of shares, issue of debentures, loans from banks and other financial institutions, public deposits (for existing concerns), ploughing back of profits (for existing concerns).Long term finance: issue of shares, issue of debentures, loans from financial institutions, ploughing back of profits( for existing concerns).
How do you paraphrase Is my team ploughing?
''Is my team ploughing'' can be rephrased as "Are my friends ploughing the fields?"
When was Is My Team Ploughing created?
Is My Team Ploughing was created in 1896.
When was National Ploughing Championships created?
National Ploughing Championships was created in 1931.
What is the difference between ploughing and plowing?
Ploughing is the correct spelling, plowing is the US spelling.
What is summer ploughing?
it is ploughing of fields in summer so as weeds,harmful insects..,nematodes and fungi may be minimised.
When was the National Ploughing Association founded?
The National Ploughing Association was founded in 1931.
How is summer ploughing useful?
Ploughing one month in advance i.e. in the month of May for kharif crops is known as summer ploughing. There are the three usual harvests known as the kharif or autumn (June-September), the rabi or spring (October-March) and zaid or extra harvest (March-June). Summer ploughing helps to kill weeds, hibernating insects and disease-causing organisms by exposing them to the summer heat. Summer ploughing of groundnut is always advantageous.
What are the steps in preparation?
ploughing levelling manuring
What does a ploughing machine do?
it turns the soil to airate
What jobs did a reeve supervise?
harvesting and ploughing.
What is the differentce between a bank and a credit union?
A bank's profits go to the bank and its chief officers. The profits of a credit union go back to its members.
