The reinvestment rate significantly affects a company's growth. When a company has a high reinvestment rate, it means that it is putting a large portion of its profits back into the business. This can lead to increased growth as the company can use these reinvested funds to invest in new projects, expand operations, or improve existing operations. However, if the reinvestment rate is too high, it could indicate that the company is not efficiently using its capital and could be over-investing in projects with low returns. Therefore, it's important for a company to find a balance in its reinvestment rate to ensure sustainable growth.
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