Internal Sources Of Finance And Finance Essay - 2349 Words

Internal sources of finance: Internal sources of finance are funds that arise from within the business such as profits as they can be retained to grow the finance and selling assets. Retained profit Retained profit is the money kept in the company after paying dividends. It is used to reinvest in the business or to pay debt. It comes by a business after it makes profit and is kept separate to use in other ways such as expanding the business by developing new buildings or certain areas, buying new vehicles, updating the equipment and machinery or the company can also decide to save the money. This is a good method as there is no interest and it doesn t have to be repaid like other loans. It is a long term source of finance since there is no maturity like term loans and debentures. Retained profits are flexible; the administration has control over the money; the amount which must be reinvested and which should be paid as dividends. Yet, business may not make enough profit in order to reinvest or the money could have been invested somewhere else where there are chances of earning a higher profit. It does not operate for new businesses since they haven t made enough profit for inves ting in their own business. Tesco can easily use their retained profit for the above mentioned applications as they make enough profit from selling products. Selling assets Assets such as property, investments, equipment or machines which are no longer needed or have been replaced can be sold inShow MoreRelatedInternal Sources Of Finance Are1491 Words   |  6 PagesInternal sources of finance are: â€Å"Organic growth†- This is when the business sponsors itself to grow and develop. It can be attained through: Generating increasing sales- increasing in revenue to increase the overall gain. Use of retainedRead MoreInternal And External Sources Of Business Finance2171 Words   |  9 Pagesbusiness I am going to be talking about will be a shop called news, food and wine. This shop can use a wide variety of different internal and external sources, this is why I’m going to be using this business. A shop will need business finance because they might want to expand the business, they can’t afford to pay workers or the bills or they have just started up. Internal finance is to do with money that is coming from the owners or already in the company. However external means that the money is beingRead MoreInternal Sources Of Finance Are Inside The Business2513 Words   |  11 PagesInternal sources of finance are inside the business and are made from the company itself by the services they provide, such as selling stock or keeping back a profit. External sources of finance are from outside of the business from elsewhere, such as an owner who invests money into the business, loans from a bank or people you know, debentures which are loans made to the company, a mortgage, hire purchase, leasing or grants. However these are long term external sources, some short term ones couldRead MoreInternal And External Sources Of Finance For Tesco P4978 Words   |  4 Pagesï » ¿Internal and external sources of finance for Tesco Internal sources of finance (Tesco) Retained earnings: A source of finance used by Tesco is retained earnings. Tesco re-invest a certain percentage of their end of the year profits back into Tesco, so they can improve it. Each year Tesco decide how much money they re-invest, this depends on the profit they make. Fixed assets: Another type of an internal source of finance for Tesco is fixed assets. Fixed assets are an asset that is not consumerRead MoreSources of Internal and External Finance for American Chicken959 Words   |  4 Pageschicken on the different sources of finance available to them , both internal and external. By doing this it will help them achieve both of their business objectives mentioned before. Overview There are two sources of finances available to American chicken, internal and external. Internal sources of finance are finances raised from inside the company for example profit that is re-invested into the business known as retained profit. Internal finance is generally the type of finance that a new businessRead MoreSources of Internal and External Finance for Marks and Spencer760 Words   |  3 PagesMarks and Spencer Sources of Internal and External Finance for Marks and Spencer Mark and Spencer is one of the leading UK retail companies that deal in clothing, house hold items and most recently food. It has a range of outlets over the world for it products. Mark and Spencer source of finance is both internal and external which are discussed briefly in this paper. The paper further discusses the use of budget as a means to exercise financial control. Internal source of finance The CorporationRead MoreDescribe Sources of Internal and External Finance for a Selected Business.999 Words   |  4 PagesAll businesses need money to function sufficiently. Where this money comes from is defined as sources of finance. There are two different types of sources of finance: internal (capital from inside the business) and external (capital from outside the business). New businesses starting up need money to spend in long-term assets such as premises and equipment. They also need cash to pay for materials, pay wages, and to pay the day-today- bills such as water and electricity. In-experienced entrepreneurs  oftenRead MoreP4 Describe Sources of Internal and External Finance for a Selected Business.869 Words   |  4 PagesHead of Finance Report From: Monaj Gurung Date: 23rd October 2012 Title: sources of internal and external finance for Waitrose Source of Finance All business needs money in order to operate properly. Finance simply means the management of some amounts of money. And source of finance is generally the place where money comes from. Example Waitrose gets money by selling their products to the customers and hence customers are the different classes Internal and External source of finance. InternalRead MoreDescribe Sources of Internal and External Finance for a Selected Business, Unit 2 P41424 Words   |  6 PagesDescribe sources of internal and external finance for a selected business For a business to run successfully on a daily basis it needs finances. Success comes when a business expands, reinvests and uses human recourses to run. Bentalls need money to run their business effectively and successfully. It needs finance for its daily running of the business for example, paying staff wages, paying bills for electricity and rent, paying taxes on time and ordering stock regularly. For a long term goal, BentallsRead MoreWhat is Finance Management?1598 Words   |  6 PagesWhat is finance management? â€Å"Financial Management is the Operational Activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation.† by Joseph Massie. What is capital market? â€Å"Are places where companies which need long term finance can meet investor† (business study guide, p120) P1.1- Identify the sources of finance available to new business you have chosen. Every business needs finance of money to invest; there are a number of ways