Internal Finance. Flashcards
(10 cards)
What is internal finance
Money that is raised within the business
What is retained profit
Profit that is saved from previous years
Benefits of retained profit
Business has control over where profit is used
No approval needed
No interest
Disadvantage of retained profit
Small sum of finance
Takes time to save
What is selling unwanted assets
A business gets rid of any unnecessary assets
Benefits of selling unwanted assets
No interest
Less storage require
Money can be made
Drawbacks of selling unwanted assets
Asset may depreciate in value overtime so less money then what paid for
Dependant on demand
Hong process
What are all types of internal finance
Owners capital
Retained profit
Selling unwanted assets
Pros of internal finance
No interest
Business has control over finance
No waiting period
Cons of internal finance
Limited amount of money
Takes time to save money
long term
