2.1.1 Internal finance Flashcards
1
Q
What is internal finance?
A
The funds generated and used within a business to finance its operations
2
Q
What are the methods of internal finance?
A
-Savings
-Retained profit
-Sale of assets
3
Q
What is retained profit?
A
When a company retains a portion of its profits instead of distributing them
4
Q
What are sale of assets?
A
Selling assets that can generate money
5
Q
What are the 3 pros of internal finance?
A
-No interest to pay
-Control of Finance
-Flexibility (control over timing)
6
Q
What are the 2 cons of Internal finance?
A
-Cannot raise large amounts
-Limited amount, limited growth
