What the advantages of retained profit?

Answer 1

· This is often a very difficult idea to understand but, in reality, it is very simple. When a business makes a profit and it does not spend it, it keeps it - and Accountants call profits that are kept and not spent retained profits. That's all. The retained profit is then available to use within the business to help with buying new machinery, vehicles, computers and so on or developing the business in any other way. Retained profits are also kept if the owners think that they may have difficulties in the future so they save them for a rainy day!

Answer 2

Beyond the obvious to those who benefit, profit is the force that motivates people to produce goods and services therby expanding the economy.

Answer 3

they show the overall of how business has made over the year and they have to decide wether to continue wiff the business or not