Internal Finance
- Created by: Izzie
- Created on: 28-04-17 09:00
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- 2.1 Internal Finance
- Owner's capital
- How much the owner has invested in the business
- Don't have to repay
- No interest
- Risk of saving can be motivating
- Limited amount available
- Risk to personal finance
- Retained Profit
- Profit kept within a business from profit for the year to help finance future activities
- Avoids interest repayments
- Doesn't dilute business ownership
- Only an option if there's a sufficient amount of retained profit
- May cause shareholder dissatisfaction if at expense of dividend payments
- Assets
- Item of value owned by a business
- Current Assets
- Items owned that will change in value in the short run
- Fixed Assets
- Will stay in the business for more than a year
- No interest charge or repayment
- May be turning an obsolete asset into finance
- Immediate lump sum cash injection
- May be expensive in long run if need to lease asset back
- A one off option
- Loss of use off asset and its future value
- Owner's capital
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