2.1.1 internal finance Flashcards
1
Q
reasons for raising finance
A
to pay debts
help a business over a slow trading period.
to expand
to start up a business
to buy stock
2
Q
owners capital
A
shows the stake the owner has in the business.
represents the net assets of the company
3
Q
retained profits
A
after a year or more of trading a business may have some profits they can re invest into the business to help it grow
4
Q
advantage of retained profits
A
no interest to pay
5
Q
disadvantage of retained profits
A
once it is used it has gone
6
Q
sale of assets
A
businesses sell items they already own
e.g. machinery, land, premises, vehicles.
7
Q
disadvantage of sale of assets
A
business no longer has the benefit of that asset.
doesnt appear on the company balance sheet.
makes the business look less attractive to investors
