10 - Sources Of Business Finance (Internal) Flashcards
1
Q
What are 2 advantages of retained profit?
A
No interest
No loss of control/ownership
2
Q
What are 2 disadvantages of retained profit?
A
Limited amount available
Reduces shareholder payments
3
Q
What are 2 advantages of net current assets?
A
Encourages effective cash flow
Promotes efficiency
4
Q
What are 2 disadvantages of net current assets?
A
Less stock can impact the ability to meet customer demand
Shorter credit terms offered, more pressure on customers
5
Q
What are 2 advantages of sales of assets?
A
No interest
Business can dispose of any old assets
6
Q
What are 2 disadvantages of sales of assets?
A
Amount received won’t be a true reflection of the asset’s value
Can increase costs if the asset is needed in the future
