2.3.1.2b - Retained profit

Explain retained profit as internal finance.

Use b - retained profit to connect the rule to the data and decision in the question.

This matters because b - retained profit determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - retained profit to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Retained profit is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.