Internal Finance.

Finance

management of investment needed to open, run or grow a business

Owners Equity meaning

Shows the stake the owner has in business

Owner’s Equity Advantage

Shows commitment to business so more attractive to investors

Owner’s Equity disadvantage

Limited, Might need to take out loan so pay interest

Retained Profit

Saved up profits saved up after a year or more of trading, that is able to be reinvested into the business.

Retained Profit advantage

No interest to pay.

Retained profit Disadvantage

Once It’s used, it’s gone and cannot be reinvested in other places in the business.

Reasons why Sale of assets

A business can raise by selling items they own.

Advantages of selling assets

Can Improve efficiency, raises finance, increases capacity utalisation.

Disadvantages of selling assets

Looks bad on balance sheet so unattractive to investors, loses benefit of asset.