Close Navigation
.

Reinvestment Rate

Trading Term

The reinvestment rate represents the portion of earnings returned to the business rather than distributed to investors. Reinvestment may include capital expenditures, working capital, research, acquisitions, and other growth initiatives.

A high reinvestment rate is not automatically beneficial. Its value depends on the return earned on the additional capital, making incremental return on invested capital an important companion measure.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.