Sources of Finance Flashcards
(6 cards)
1
Q
What is internal finance?
A
It is capital gained from within the business.
2
Q
What is external finance?
A
It is capital gained from outside the business.
3
Q
What is retained profit?
A
It is the profit left over after all expenses and dividends are paid.
3
Q
What are four ways of internal finance?
A
- Retained profit
- Owners savings
- Sale of assets
- Sale of inventory
4
Q
What is gross profit?
A
It’s the profit left after inventory costs* are paid but not anything else
*e.g manufacturing or buying of goods.
5
Q
What is net profit?
A
It’s the profit left after all expenses are paid but before dividends.
