What is ploughing back of profit as a source of finance gives any two benifit of it and explain it

What is ploughing back of profit as a source of finance gives any two

1.	What is ploughing back of profit as a source of finance gives any two benifit of it and explain it
Answer» 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.