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In corporate finance, what do we call the percentage of the residual cash flow that is retained by the firm for growth purposes?
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In corporate finance, what do we call the percentage of the residual cash flow that is retained by the firm for growth purposes?

User Robert Audi
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5 votes

Answer:

The answer is: plowback ratio

Step-by-step explanation:

The plowback ratio measures the amount of earnings that are reinvested by a corporation after dividends have been paid out. It helps investors understand how much money the corporation is using to reinvest in new or existing projects. The more money a company reinvests, the more it can grow without having to take debt.

User Marcin D
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