from The American Heritage® Dictionary of the English Language, 4th Edition
- n. Reinvestment of profits in the business that earned them.
- n. An amount of profits thus reinvested.
Sorry, no etymologies found.
Moreover, today many investors hold stocks in tax deferred accounts (401K, 403b, IRA, or even tax free in the Roth IRA) and many investors utilize DRIPs (dividend reinvestment) featured by most brokers, essentially allowing for the same plowback principle to take place.
The median plowback rate within our diversified universe is 16% of sales.
Instead of opting for a traditional earnings-based plowback calculation, we instead turned to the cash flow statements to get a sense of how the companies actually invested capital.