Internal Sources of Finance – Retained Profits
Internal finance comes either from the business’s owners (equity or capital) or from the outcomes of business activities.
Owners equity: funds contributed by owners or partners to establish and build the business.
Retained profits : Money that has been earned by the business and has not been distributed to shareholders in dividends.
NET PROFITS – DIVIDENDS = RETAINED
Extract from Business Studies Stage 6 Syllabus. © 2010 Board of Studies NSW.