Definition of the word plow back

The phrase "plow back" originated in the context of agriculture and refers to the practice of returning a portion of a crop's yield to the soil as organic matter, which enriches the land for future harvests. This practice is called "plowing back" because farmers use a plow to turn the earth and incorporate the crop residue into the soil. In the business world, "plow back" has a similar meaning, except it refers to profits that are reinvested in the company instead of being paid out to shareholders or taken as dividends. This use of the phrase began in the early 20th century when companies started using the term to describe the practice of reinvesting earnings to grow the business and improve profitability rather than distributing profits to shareholders. In essence, just as farmers plow back organic matter into the soil to improve future crop yields, companies "plow back" profits to improve future profits.