"As retained earnings are generated internally, there is a greater degree of operational freedom and flexibility." Please explain.
Nivedha,
It is one of the merits of retained earnings that as the retained earnings are generated internally, there is a greater degree of operational freedom and flexibility. As we know retained earnings refers to the amount that a company save from the amount of its profits for future prospects. This source of fund is generated by company internally and can be used in any kind of operations without any restrictions. Company do not have any kind of obligation on this source of fund. It enjoys a great flexibility in the sense that as and when required, company can increase or decrease the amount of its retained earnings depending upon its career prospects.
All the very best for your exam and you can mail me the images of your question paper Business Studies at amit.chatterjee@meritnation.com. This would help us to host the solutions of your set of paper on our site.
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It is one of the merits of retained earnings that as the retained earnings are generated internally, there is a greater degree of operational freedom and flexibility. As we know retained earnings refers to the amount that a company save from the amount of its profits for future prospects. This source of fund is generated by company internally and can be used in any kind of operations without any restrictions. Company do not have any kind of obligation on this source of fund. It enjoys a great flexibility in the sense that as and when required, company can increase or decrease the amount of its retained earnings depending upon its career prospects.
All the very best for your exam and you can mail me the images of your question paper Business Studies at amit.chatterjee@meritnation.com. This would help us to host the solutions of your set of paper on our site.
You can refer to the power tips by our experts for Business Studies and other Commerce Subjects on youtube by following the below links.
For Accountancy For Economics For Business Studies For Math MORE to COME...