Sources of Finance

| The business itself does not retain any profits. 100% of profits remain with the owner and is considered personal income.

There are two types of profits; the first is normal profit which is the level of profit that is required to keep

Retained profit is when the money is re-invested back into the business leading to improve or expand the business. This is when the business generates profit, but it is kept in the corporate rather than dividing among the shareholders or between the partners. This finance is considered as long-term source of investment for an organisation. Retained profit has advantages and disadvantages. Advantages for this type of finance are;

In the daily operations of the skilled nursing center where I work, there are two kinds of capital, fixed capital and working capital. Fixed capital consists of the building, grounds and equipment and working capital is what is necessary to manage the day to day activities of the center. When I add together the totals for current assets and current liabilities in the balance sheet, a very important figure can be calculated, working capital. Effective management of working capital is essential to my center’s fundamental financial health and operational success. An indication that a facility is in the hands of a strong administrator; is one who has the ability to utilize working capital management to sustain a solid balance between

Traditionally, one of the most difficult part for an entrepreneur to turn their idea into reality is raising capital. However, with the recent technology boom and a society that gets euphoric from new ideas, entrepreneurs now have a plethora of new ways to get their company funded, with crowdfunding as the most recent new way of raising capital.

1. If a company reports retained earnings of $175.3 million on its balance sheet, it must also report $175.3 million in cash.

At the end of 2011, retained earnings for the Bisk Company was $1,750. Revenue earned by the company in 2011 was $2,000, expenses paid during the period were $1,100, and dividends paid during the period were $500. Based on this information alone, retained earnings at the beginning of 2011 was

Introduction: In this particular task of the unit I will describe the internal and external finance sources for a particular selected business. In this task I will use the same company as I did before in the previous part of the unit. The name of the company is : Media Markt. In this task we will get to know where money actually comes from to actually create such a big company which is well known of its electronic products.

Because of the complexities involved in financial accounting, errors do occur. Errors may result from a change in accounting principle, mathematical mistakes, changes in estimates not prepared in good faith, an oversight, a misuse of facts, or an incorrect classification. These errors can cause serious financial report misstatements. When errors are discovered, adjustments must be made to prior periods. These adjustments result in a change in the retained earnings balances for those periods. The company goes back to the earliest period affected by the error when calculating these adjustments (Kieso, Weygandt, & Warfield, 2007).

Capital budgeting is a long-term schedule that decides what investment projects to choose. When an option is selected, a company decides where and how to obtain the funds to support its investment and a way of determining the capital structure. A company should make sure it has access to working capital to maintain it operations daily. If this is not available, the company will not be able to maintain it daily operation until

Working capital is the money that a company has after paying off its current liabilities and with which it can finance its operating and working capital requirements. The higher a number the better a company is able to pay off its debt and have cash for meeting its financial obligations. The current ratio is used to gauge a company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. The current ratio denotes the efficiency of a company's operating cycle or its ability to turn its products into cash, which is a key requirement for business success. Quick ratio is an indicator of a company's short-term liquidity. The quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets, essentially cash and cash equivalents. The higher the quick ratio, the better the financial position of the company in terms of its ability to meet its liabilities.

•In an income statement, profit is shown as it is earned rather than when the company and its customers get around to paying their bills.

Essentially, retained earnings demonstrates the amount of earnings that are reinvested into the company or the loss incurred by Trump Entertainment and Resorts since operation commenced. Based on calculation Trump Entertainment and Resorts had a score of -0.056. This is relatively low and indicates that the financing of assets at Trump Entertainment and Resorts was not a result of profit retention but that they have maximized their full potential of acquiring debts in order to remain

The team shared the importance of having a good bank to raise the capital. It is also important to know the time frame to pay off the amount, pay schedule and having a good plan to pay off the amount on time is crucial. The question about buying things, owning things, renting things and leasing things- all depends on whether the business

| |[pic]|million); the $15 million in retained earnings is treated on the company’s balance sheet as additional accumulated |