May help the business in the future, maybe to help develop the business
What Are The Advantages And Disadvantages Of Retained Profit?
• They need not be paid back since it is the organisation’s own money
• There are no interest payments to be made
• The company’s debt capital does not increase and thus gearing ratio is maintained
• There are no interest payments to be made
• The company’s debt capital does not increase and thus gearing ratio is maintained
An advantage is that you don't have to pay interest
Advantage is you can use the profit for it's own use