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I am not a finance professional but…

Say you make $1 of profit, does that translate into $1 your company can control for its benefit? If kept as profit part of that dollar flows out of the company, to other companies and possibly to the government as taxes (god forbid).

If the company reinvests then it fully benefits from its would be $1 as opposed to someone spending it elsewhere.

IMO Accounting is the only reason many companies don’t turn an external “profit”



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