Update

Related Content

Related Overviews

 

More Like This

Show all results sharing these subjects:

  • Social sciences
  • Economics

GO

Show Summary Details

Overview

plough-back


Quick Reference

The system of financing investment in firms by retaining profits. This is contrasted with financing investment by borrowing or issuing new equity capital. The advantage of plough-back is that it retains control, and reduces gearing if the firm has borrowed in the past. The disadvantage is that complete reliance on internal finance limits a firm's possible growth rate, and it cannot be applied in new firms.

Subjects: Social sciencesEconomics


Reference entries