Is it right to ploughing back business profit.

[CALVINDOL]

By definition the act of ploughing back business profit , refers to the act of not taking business profit away but rather invest in the business profits back into the business possibly in a longer term this is usually called re-investment . There are a lot of advantages and benefits why a business can re-invest it profit . For example when a business profit is being reinvested there is every possibility that business productivity and output will actually increase in a high potential rate . Yet there is actually a particular stage that the business should be before a business owner consider the intention to reinvest is profit . If the business owner sees that the business productivity is slowly dying off then ploughing back of business profits could be a way to save the business from this negative repercussions that it faces .

Ploughing back of business profit into business could be a way to make sure the business assets and properties do not depreciate in a high potential rate . The reinvested income could be used to replace business assets that are totally worn out or damaged . And in this case the business can actually get back on its feet again and productivity on the other hand will actually increase .

 

[TOZZIBLINKZ]

In my own perspective and definition what I understand by the act of a business owner ploughing back his business profit simply means we invest in his business profits and income into the business possibly because he or she want to handle one or two matters that are making the business to suffer negative rather than positive repercussions and effects . Although I do not like the idea for a business owner to reinvest his business profits back into his business but yet they are some reasons and reasonable ideas for doing so . Sometimes business stocks and inventory could be at a diminishing and finish rate and the business possibly may have not make enough sales as possible so what could be proper to do in that situation is to reinvest business profit so as to replace stock and inventory is needed by the business for the purpose of resaling to make money .

I'm just like you already mentioned a particular business may come to see that his business equipment and machines are on a diminishing figure so in order to replace wanted equipment and machines in the business organisation who possibly could be an industrial based business organisation , the reinvesting all the ploughing back of business profit could go a long way to suffice the matter .