concept of financial_research

May 28th, 2015
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A. T. Still University
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As sources of finance as classified into internal and external, which is based on the generation of finance source. A new company can raise the required long-term funds from external sources, but an undertaking, which is well established, can generate funds not only from external sources but also from internal sources. Internal sources of finance is available only for firms that are existing and well established.

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Anusha sastryPooja keshriSupriya kuntaSharath chandraVignesh kumarSanjay SahaniInternal Financing Sources As sources of finance as classified into internal andexternal, which is based on the generation of financesource. A new company can raise the required longterm funds from external sources, but an undertaking,which is well established, can generate funds not onlyfrom external sources but also from internal sources.Internal sources of finance is available only for firmsthat are existing and well established. Internal sources of finance are: Retained earning Depreciation charges. Retained earning :Retained earning is an important source of internalfinancing of well-established companies. It is theportion of earning available to equity shareholders,which are ploughed back in the company. In otherwords, a of earning available to equity shareholders thatare retained for future investment. Factors Influencing Retained Earning Earning capacity of a companyPloughing back of profit arise only when the companyhave sufficient profits earnings. Larger the earnings,larger the ploughing back of profits. Types of dividend policyPloughing back of profits depends on the dividendpolicy of a firm. In other words,a retained earningdepends on the dividend policy adopted by the topmanagement with regards to distribution of earnings. Taxation policy of the governmentEarning available to shareholders are the profits after

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