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.
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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