2.1.1. Internal Finance

Question 1

Owners capital: personal savings

Answer 1

-Usually used as source of start up finance
-Owners personal savings, redundancy payments
-Money could be in form of share capital or loan

Question 2

Retained profit

Answer 2

-Once all costs covered and dividends paid to shareholders, any profit left is retained in business.
-Safest,most common form of internal finance
-Must be available in form of cash
-On balance sheet retained profit appearing doesn’t imply money is still available only that it’s been retained

Question 3

Sale of assets

Answer 3

-Sekking assets that are no longer needed to generate cash