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Write a short note on Retained Earnings. - Commerce

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प्रश्न

Write a short note on Retained Earnings.

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उत्तर

Retained Earnings:

Retained earnings refer to the process of retaining a part of net profit year after year and reinvesting them in the business. It is also termed as plowing back of profit. An individual would like to save a portion of his/her income for meeting the contingencies and growth needs.

Similarly, a profit-making company would retain a portion of the net profit in order to finance its growth and expansion in near future. It is described to be the most convenient and economical method of finance.

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Sources of Business Finance
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अध्याय 19: Sources of Business Finance - Exercises [पृष्ठ २०१]

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सामाचीर कलवी Commerce [English] Class 11 TN Board
अध्याय 19 Sources of Business Finance
Exercises | Q IV. 3. 1. | पृष्ठ २०१
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