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प्रश्न
Answer the question.
Discuss three advantages of plowing hack of profit, from the company’s point of view.
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उत्तर
Ploughing back of profits refers to the process of retaining a part of the net profit year after year and reinvesting the same in business.
There are some advantages of ploughing back of profits are :
(i) The company can undertake its plans for expansion, growth and modernization without bothering about conditions in the capital market.
(ii) Ploughing back of profits add to the financial strength and creditworthiness of the company.
(iii) Reserves created by ploughing back of profits can be used to stabilize the rate of dividend on equity shares.
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संबंधित प्रश्न
What has retained earnings? Explain any two of its merits and two of its demerits.
Select the correct answer from the options given below and rewrite the statement.
Retained earnings are ______ source of financing.
Find the odd one.
Answer in one sentence.
What are retained earnings?
Explain the following term/concept.
Ploughing back of profit
Justify the following statement.
Retained earning is simple and cheapest method of raising finance.
Explain any four disadvantages of Retained Earnings.
What are retained profits called “self-financing”?
Discuss the advantages of retained profits as a source of finance.
Discuss the disadvantages of retained profits as a source of finance.
