Listen to a Business English Dialogue About Undivided profits
Olivia: Hi Katherine, do you know what undivided profits are?
Katherine: Hi Olivia, yes, undivided profits are retained earnings that have not been distributed to shareholders as dividends.
Olivia: That’s correct. They represent the portion of a company’s earnings that is kept within the business for reinvestment or other purposes.
Katherine: Right. Undivided profits are often used by companies to fund expansion, research and development, or to strengthen their financial position.
Olivia: Exactly. By retaining earnings, companies can build up their reserves and better withstand economic downturns or unexpected expenses.
Katherine: Yes, and it can also signal to investors that the company is financially healthy and has confidence in its future growth prospects.
Olivia: That’s true. Investors often view a company’s ability to generate undivided profits positively, as it demonstrates long-term sustainability and potential for future returns.
Katherine: Indeed. Undivided profits play a crucial role in supporting a company’s growth and overall financial stability.