Profit made after cost of sales, other expenses, interest, tax and any dividends to shareholders have been deducted from revenues, and reinvested in the business. Any retained profit the business earns is transferred to the retained profit reserve in the balance sheet. This may be in the form of cash at bank or in hand, or money that has already been used to purchase new machinery or stocks of materials. The retained profit figure shown on a business’s Balance Sheet is all the retained profit ever made, including this year’s profit extracted from the Income Statement (Profit & Loss Account) as opposed to other sources of finance such as bank borrowing or selling shares. Although it might not be popular with shareholders as it means lower dividends in the short-term, there are advantages of using such funds: unlike bank borrowing there are no interest payments to make, and there is no dilution of ownership and control associated with selling shares.