Revenue and capital expenditure Essay Example | Topics and Well Written Essays - 1250 words

Revenue and superior expenditure - Essay ExampleInternal Sources of payFunds are generated in two ways - 1. generating derive and retaining them in the business. 2. By selling approximately of his assets. Only successful business can retain the get ahead. It is very difficult to decide how much profit should retain and how much should distribute. Retaining a large proportion of profit requires a long-term view. Retained profit is the most important outset of pay for small as well as large-scale business. exchange of Asset -If the firm has no other way to arrange funds from any source, then reluctantly the firm sells a particular division or a subsidiary business. Sale asset is a quite normal part of the business. Sometimes the firm buys another firm with the intention of raising finance by selling off its assets. This is known as asset stripping.External Source of FinanceThis source is divided into two parts, first is short term funds and second is long term funds. long-run f unds are very useful for new business but all types of businesses need capital planning. yearn-term funds are of two types -1. Share Capital 2. Loan CapitalShares are the cogent evidence of ownership. Each shareholder has a share in the business. Shares can be sold at a profit. If a company wants to arrange a lot of funds through the share, it can offer the shares for trade to outsiders. When the private company issuesLoan CapitalLong term loans are part of the capital of the business. Long term loans come in forms of mortgages, long-term bank loans, venture capital, and debenture.