internal sources Flashcards
1
Q
Internal sources
A
sources of money from within the business
2
Q
Examples of internal: owners funds
A
money that is put into the business from private savings of the owners.
3
Q
Owners funds: Advantages
A
- no need to pay interest or even repay finance
- Retention of ownership by the individual
4
Q
owners funds: disadvantages
A
- available amount may be limited
- puts stress on the day to day finance of the individual.
5
Q
retained profits or ploughed back profits.
A
The owners of a business can choose to spend the profits on themselves or use some or all to expand and improve the business.
6
Q
Retained profits: advantages
A
- internal, therefore don’t need to repay
- instantly available
- no additional costs such as interest repayments.
- control isn’t lost
7
Q
retained profits: disadvantages
A
- may be limited funds available
- shareholders may want to see short term returns on their investments
- not an option for a start up business.
8
Q
Sale of an asset
A
some businesses will have possessions that they no longer need, these can be sold off to raise money needed for other investments.
