Skip to content
MarkSchemeMarkScheme
Sign up — no card

9609 · 5.2.2

Internal and external sources of finance

**Sources of finance** (5.2.2) is one of the **most examined AS topics**. Build a revision table: **Source | Internal/External | Best for | Pros | Cons**. Examiners ask you to **match** a scenario (start-up, expansion, cash crisis) to the right source.

Need to know

What you need to know

  • Main sources: Retained profit and the sale of assets.
  • Advantages: No direct cost (interest), no loss of control or ownership.
  • Disadvantages: Limited amount available, potential for shareholder conflict (opportunity cost of dividends), selling assets may be a slow process.

Explanation

Internal and external sources of finance

  1. Main sources: Retained profit and the sale of assets.
  2. Advantages: No direct cost (interest), no loss of control or ownership.
  3. Disadvantages: Limited amount available, potential for shareholder conflict (opportunity cost of dividends), selling assets may be a slow process.
Mark this topic →Open full visual lesson