Unappropriated Profit

Unappropriated Profit: Unappropriated Profit can simply be defined as surplus earnings, that is not required to be paid out to the shareholders as dividend. These funds can be earmarked for reinvestment into the business and basically can be used in any way deemed to be in the best interests of the company.

The most common use of unappropriated profit is usually reinvestment into the organization. This can be accomplished in different ways, with investment in core operations such as up gradation and replacement of facilities, or using the funds to start a marketing campaign. The funds can be also utilized to enhance the human resources of the organization, such as new training modules for the employees to enhance their skill sets.

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Unappropriated Profit can be also be used to reduce the debt load of the organization in order to improve the bottom line of the company. If investment into up gradation or replacement is not deemed necessary, the extra funds can be used to reduce outstanding debts.

Edited and Updated 08th March 2014

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