A portion of profits, which a company retains itself for further expansion, is known as:
Correct answer: B. Retained Earnings
- A. Dividends
- B. Retained Earnings
- C. Capital Gain
- D. None of the given options
Explanation
Retained earnings are the portion of after-tax profit kept in the business instead of being distributed as dividends. They can finance expansion, asset purchases, or other corporate needs.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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