main objective, pursued by the entrepreneurs is profit.This flow is an element of net income, which was received after the production of and implemented as a cash company.The profit can be used in different ways.Next, consider one that allows you to expand the scope of the organization.
Terminology
reinvestment of profits - is a relatively cheap way of financing.The purpose of the activities on the distribution of income is to expand the business.A degree of such development of the organization shows the reinvestment rate.In this case, it is important to the proper distribution of revenues, including among members of the company.During the procedure, the distribution of profits, it is important to take into account the interests of society, the specific business and personnel.
essence of
Reinvestment - a repetition of the procedure of the original investment income.It is done in order to obtain additional revenues.If it is easier to explain, we can say that the reinvestment - is to increase the contribution by money as interest.They are charged in the period between re-investment of finance in the company's development.
benefit
With accuracy can say that reinvestment - a cost-effective procedure.After all, in fact, are added to the existing interest of new ones.Often this procedure is called "compound interest."Just think the addition to the initial capital.But Russian banks rarely provide services reinvestment.Either they offer such conditions that make the deal less profitable.But in other countries, reinvestment gained wide popularity.
dependence revenues
So under what conditions should be conducted reinvestment to the depositor could get the maximum benefit?Proceeds will be greater if the procedure is performed more frequently.Reinvestment percent occurring once a month, can be considered very profitable.However, the most successful variant is the attachment carried out every week.
PAMM
On peculiarities of reinvestment can tell, using the description of PAMM-accounts.This type of investment is more accessible and requires less initial capital.There are other positive aspects.Thus, manipulations with the cash account (deposits and withdrawals) is available at any time.In the case of the PAMM-account the Manager, other than the investor's money, are his own.Reinvestment - a procedure which necessarily occurs if the deposit is on the PAMM-account brokerage firms.From the investor is only required to deposit funds and withdraw funds from it.The latter do not necessarily - you can keep the money.Then they will become part of the deposit.But reliability is to transfer part of the profits to different accounts.You can conduct a simple calculation.When investing ten thousand dollars profit of four percent, after following the reinvestment of interest will be deducted from the new amount, ie from ten thousand four hundred dollars.
Terms
Interest income is accrued during that time, while the reinvestment made.The extent of the yield of this procedure is determined by the sum of the contribution and its duration.Average increases the initial capital investment, while the effect on the amount of reinvestment of profits.It is important to take the time to remove the interest income.It is advisable to re-direct them to reinvest.
true that the reinvestment of capital - a financial panacea?
Each investor must decide on their own whether or not to apply it to such distribution of funds as the main source of income.After all, choosing a way to earn money, it is important to have the ability to feel the market is fast reaction to any changes within it, not be afraid of risk.If you compare the capitalization of the generation of income from shares, it can be said that the reinvestment - a less risky way.But even this method is threatened by inflation.
final part
engaged in distribution of net profits of the enterprise.If we turn to the law, it becomes clear that distributed part of it goes to the federal budget or the budget of another entity of the country, representing a tax or other mandatory payments.We can say that the part of the profits of the enterprise, which was obtained by reinvesting is an internal source of funding for the organization.Income received thus protects the company from additional budget expenditure.If the organization is engaged in reinvestment, the number of shareholders of the Company remains unchanged.
