Advertisements
Advertisements
प्रश्न
Explain the following term/concept.
Ploughing back of profit
Advertisements
उत्तर
- Retained earnings are the earnings of the company which are retained (reinvested) in the business. The sum of those profits accumulated over years is reinvested in the business, rather than distributing it as a dividend to shareholders.
- It is the simplest and cheapest method of raising funds. It is an important source of internal financing. Thus, it is also known as ‘Self Financing’ or ‘Ploughing Back of Profits’.
संबंधित प्रश्न
Select the correct answer from the options given below and rewrite the statement.
Retained earnings are ______ source of financing.
Write a word or a term or a phrase that can substitute the following statement.
The policy of using undistributed profit for the business.
Find the odd one.
Answer in one sentence.
What are retained earnings?
Correct the underlined word and rewrite the following sentence.
Retained earnings is an external source of finance.
Study the following case/situation and express your opinion.
The Balance-sheet of a Donald Company for the year 2018-19 reveals equity share capital of Rs. 25,00,000 and retained earnings of Rs. 50,00,000.
- Is the company financially sound?
- Can the retained earnings be converted into capital?
- What type of source retained earning is?
Justify the following statement.
Retained earning is simple and cheapest method of raising finance.
Explain any four disadvantages of Retained Earnings.
What are retained earnings?
What are retained profits called “self-financing”?
What are retained profits?
Discuss the advantages of retained profits as a source of finance.
Discuss the disadvantages of retained profits as a source of finance.
