Internal Finances - 2.1.1

Internal Finance - 2.1.1

when setting up businesses need money to buy equipment, raw materials and obtain premises. once the business is on its way and earns a profit, they can buy more materials or even expand. This falls under either capital expenditure  where the speaning on items may be used over again e.g company vehicle, factory, machines or revenure expenditure refers ti payments for goods and servicees that have been consumed or will be very soon e.g wages, raw materials, fuel, maintains and repair of buildings and machines

 Capital is money provided by the owners within the business and this is apart of internal finace as it is generated by the business. Providing a capital is apart of being an entrepreneur and risk taking as in most cases it is used from savings.

Retained profit is profit returned after tax and is put back into the business (not to the owners) it is a easy financial help and cheapest source because there is no interest or administration. The…