Jun 21st, 2015
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I. Various sources of finance available to Phat DucFor many businesses, the issue about where to get funds from for starting up, development and expansion can be crucial for the success of the business. It is important, therefore, that the owner of Phat Duc company understands the various sources of finance open to a business and are able to assess how appropriate these sources are in relation to the needs of the business.A - Internal SourcesTraditionally, the major sources of finance for a limited company were internal sources:1. Personal savingsQuite simply, personal savings are amounts of money that a business person, partner or shareholder has at their disposal to do with as they wish. If that person uses their savings to invest in their own or another business, then the source of finance comes under the heading of personal savings. For instance, in the case of Phat Duc, when setting up Phat Duc Super Ices, he used personal savings of USD450 to cover the main cost for the van itself.2. Retained profit When a business makes a profit and it does not spend it, it keeps it - and accountants call profits that are kept and not spent retained profits. The retained profit is then available to use within the business to help with buying new machinery, vehicles, computers and so on or developing the business in any other way. In the case, in the later stage of Phat Duc company, the owner used re-invested profits from the ice cream vans to set up the flats.3. Working capital

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