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Owners Capital
money invested into the business by the owner
Advantages of owners capital
no interest and 100% ownership and control is kept
Disadvantages of owners capital
could strain personal finances and there might no the enough to support the business
Retained Profits
money made from sales reinvested into the business
Advantages of Retained profits
improves company liquidity and can reinvest into the company for growth
Disadvantages of Retained profits
shareholders may be unhappy at lowers dividends and the business becomes less attractive to investors