What to do with profits Flashcards
(5 cards)
1
Q
accounting function
A
collect and present financial data
2
Q
financial function
A
use data collected by Accounting to make financial decisions
3
Q
5 Ways to apply retained earnings in the business
A
- Investing surplus funds
- Expanding existing capacity and capabilities
- Creation of new product lines
- Expanding externally through Mergers & Acquisitions
- Purchasing patents
4
Q
dividends
A
regular payments from after-tax profits
Earned over the lifetime of share ownership
5
Q
capital gains/growth
A
Increase in share price
Only realise (earn) this return when you sell the share
