internal source of finance 2.1.1

Question 1

definition of working capital

Answer 1

the capital of a business which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities

Question 2

definition of internal source of finance

Answer 2

capital generated through the business :

1) retained profit
2) sales of asserts
3) owners capital
4) improve management of working capital

Question 3

definition of retained profit

Answer 3

profit that has been made by the business in previous years that is then reinvested back into the company.

Question 4

definition of sales of assets

Answer 4

selling business asserts to generate money to the put back into o the business

Question 5

definition of owners capital

Answer 5

this could be personal saving of owners /time put into the business

Question 6

definition of improved management of working

capital

Answer 6

stretching of existing capital through negotiating to pay bills later or work in getting cash earlier form
customers