internal financing


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Internal Financing

Finance that does not come from issuing stocks or bonds but rather from the company's retained earnings and/or depreciation. One may think of internal finance as a company's savings account that it may use to buy assets when it needs.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

internal financing

The financing of asset purchases with funds generated in the usual course of operations rather than funds that are borrowed or raised from the issuance of stock.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

internal financing

the ability to finance a firm's growth from retained earnings. A company's NET PROFIT can be paid out in DIVIDENDS or retained for internal financing, or some mixture of these two. Generally, shareholders look for some immediate income in the form of dividends and some growth in the capital value of their shares (which depends on growth of the company). By paying out more dividends, growth is slowed. Achieving the optimum solution between two conflicting objectives is an important area of study in FINANCIAL MANAGEMENT. See COST OF CAPITAL, RETENTION RATIO, RESERVES.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

internal financing

the ability to finance a firm's growth from retained earnings. A company's NET PROFIT can be paid out in DIVIDENDS or retained for internal financing, or some mixture of these two. Generally, shareholders look for some immediate income in the form of dividends and some growth in the capital value of their shares (which depends on growth). By paying out more dividends, growth is slowed. Achieving the optimum solution between two conflicting objectives is an important area of study in managerial finance. See COST OF CAPITAL, RESERVES.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
Through deposit banking activities, the bank will also increase the flexibility of Siemens internal financing operations and optimize risk management.
Jiang has said that ICBC has a three-year capital planning scheme via internal financing, issuing subordinated debt, and refinancing via the capital market.
Alternatively, a corporation can establish an 80/20 company as an internal financing entity that lends funds to other members of the unitary group.
Whether you develop an internal financing program or partner with a finance company, helping your customers finance their equipment purchases is a good investment in short-term sales and long-term customer relationships.