internal sources of finance Flashcards
1
Q
personal savings- benefits and risk
A
- don’t have to pay interest on a bank loan
- already have them
- could lose it all
2
Q
sale/lease back- benefits and risk
A
- property and ownership risks are transferred to the buyer
- increased costs, e.g monthly rent
3
Q
retained profit- benefits and risk
A
- cheap
- no interest
- cash deprecates
4
Q
factoring- benefits and risk
A
- saves time and money
- some customers may prefer to deal directly with you
5
Q
sale of fixed assets- benefits and risk
A
- valuable assets
- you might need to asset and you have sold
6
Q
reduction in current assets- benefits and risk
A
- good way to get rid of excess stock
- risk of increase of demand of demand on stock
7
Q
divestment- benefit
A
-reduces cost
