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Plow Back

   Also found in: Dictionary/thesaurus, Idioms, Encyclopedia, Wikipedia, Hutchinson 0.01 sec.
Plow back
To reinvest earnings in a business rather than pay out them out as dividends. Common practice in high-growth companies.
plow back
To reinvest earnings in additional income-producing assets. Firms that plow back earnings rather than paying the earnings in dividends tend to experience more rapid increases in earnings per share.
Plow Back
To reinvest a company's earnings into its operations. A high growth company often plows back the majority of its earnings rather than pays out dividends in order to maintain its high growth rate. On the other hand, established companies tend to plow back very little, unless they are attempting to corner or create a new market. The plowback ratio tells investors the rate at which companies do this.


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