Swastika Investmart

  When a company makes net profits, a portion of the net profits is paid out to the shareholders in dividends. This is usually referred to as paying some or all of your profits back to shareholders. Paying out dividends to shareholders of a company will normally receive a portion of those dividends as cash income. Ploughing back profits is the opposite of paying out dividends. When a company makes net profits, a portion of the net profits is paid out to the shareholders in dividends. On the other hand, ploughing back profits involves investing its money into its operations rather than distributing it to the shareholders. Example of Plough Back Ratio of X Ltd and Y Ltd X Ltd Amount Y Ltd Amount Total Equity Rs.10,00,00,000 Total Equity Rs.10,00,00,000 Net Profits 2017-18 Rs.3,30,00,000 Net Profits 2017-18 Rs.3,30,00,000 Dividend Paid Rs.66,00,000 Dividend Paid Rs.33,00,000 Dividend Ratio 20% Dividend Ratio 10% Plough Back Ratio 80% Plough Back Ratio 90% Market Capitalization Rs.52.8...

  Any company who wants to go public, has multiple reasons for raising capital. For example; let's assume you are an entrepreneur who has just started an organisation. The organization operates with few members who are responsible for profit and loss of a company. As the company started to grow further, you would decide to make its business bigger than before.  To meet such requirements, the company needs to raise capital growth for its future perspective. Another reason for raising capital could be operational expenses.  For both the above terms, a company requires a huge capital. This includes issuing shares to the people. Hence, when a private company decides to issue its shares for the first time in the stock market, it is known as going public. And the process is called initial public offering or SME-IPO .  These IPO offers investors a great opportunity to become shareholders of a company and book profit whenever the company seeks its growth.  Although ther...