internal finance

Question 1

Define finance

Answer 1

Management on the investment needed to open run and grow a business

Question 2

what are 3 reasons for finance?

Answer 2

• to pay debts
• to buy stock
• to expand

Question 3

define owners capital?

Answer 3

it shows stake in the business

Question 4

what’s a pro of owners capital?

Answer 4

no interest needs to be payed back

Question 5

what’s a con of owners capital?

Answer 5

can’t get it back once gone

Question 6

when’s owners capital appropriate?

Answer 6

sole traders and partnerships

Question 7

define retained profit?

Answer 7

profit from within the business used to reinvest back into it to grow and expand

Question 8

what’s a pro of retained profit?

Answer 8

no interest has to be payed back and it can be used straight away

Question 9

what’s a con of retained profit?

Answer 9

it’s gone and limited

Question 10

define sales of assets

Answer 10

something business owns with value

Question 11

define a con of sales of assets

Answer 11

unable to use that asset again and doesn’t appear on the balance sheet making it less attractive