“Ploughing back of profit is not possible for every company’-Expla – InterviewSolution

1.	“Ploughing back of profit is not possible for every company’-Explain statement.
Answer» A company retains profits in the good times of business. A company can only retain profits if it does not have liability more than its assets. For a new company, a small company or a financially weak company making profits and maintaining its position against strong and established companies itself is a challenge. Moreover, such companies also need to invest more in modernization, expansion and innovation of their business so that they can have a strong foot in market. They also need to provide dividends to maintain the faith of investors and encourage them investing in their company. Hence, retaining profits is not possible for every company.

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