The resulting number represents the rate of return on retained earnings, and is a measure of how well a company can finance its growth solely through the profits it earns, without taking on additional debt or issuing additional shares. As a rule of thumb, this rate can be considered the potential limit to a company's earnings growth in the future.
Every company needs capital in order to remain solvent and to grow.
However, there are costs associated with outside financing, whether it is through a public offering or bank debt. The reinvestment of retained earnings is usually the least expensive and least risky way for a company to put its hands on the cash it needs. Typically, investors look at a company's Return on Common Equity to see how well management is using its capital investment. You can usually find the dividend payments recorded on the Cash Flow Statement. It may also include the proceeds from an issuance of corporate bonds.