internal finance

benefits of owners capital

no interest or repayments

quick and easy to access

full control is kept by the owner

shows commitment to investors or lenders

limitations of owners capital

risk of losing personal savings

limited amount available

high personal financial pressure

not suitable for long term projects

benefits of retained profit

no repayment or interest

keepers ownership and control in the business

flexible-can be use when and how needed

limitations of retained profit

only availed if business is alr profitable

may not be enough for large investments

reduces money available for dividends to shareholders

benefits of sale of assets

generates cash without increasing debt

reduces storage or maintance costs

unseful for underused or old assets

limitations of sale of assets

one time source as not repeatable

selling quickly might mean lower value

business may loose useful resources

some assets may take time to sell

internal finance

the raising of capital from within the business eg business/owners capital, personal savings, retained profit

personal savings/owners capital

a source of internal finance provided by the owner of a business/ personal money from the owner

retained profit

profit is re-invested back into/kept by the business which is not paid back as a dividend. it is an internal source of finance

sale of assets

a type of internal finance involves selling resources that belong to the business

non current asset

a long term asset, an asset which cannot be turned into cash within a year

current asset

cash and other assets that are expected to be converted to cash within a year

ecenomic variable

features of economy which have effects on business and consumers

eg unemployment, inflation, exchange rates