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A scholar should be able to comprehend all the following terms before outset-ting on the finance assignment.
External sources of finance:When money for carrying out business activities come from the outside sources such as investors, finance companies, etc., it is called external financing.
Internal financial sources: Earned profit and owner-funding comprise the internal sources of finance. The money comes from within the business environment and not from the outside ventures.
Capital investment:The money invested in a business enterprise with the view of utilizing it for the purpose of capital expenditure (purchasing of fixed assets, etc.) is known as capital investment. The point to be noted here is that capital investments are never used to pay off the miscellaneous day-to-day expenses.
Growth capital: Growth capital is the capital investment made from the business expansion point of view. The company may plan to enter new unexplored markets, or may acquire a new set-up for extending its own operations; such finance objectives of a company are met with the growth capital.
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