INTERNAL ECONOMIC CAPITAL RESOURCES

Internal Economic Capital is capital to the business itself.
These funds are—for the most part—generated from internal operations. Retained earnings are a better source of capital for a company than debt or equity. It is a positive operating income accumulated from quarter to quarter. Operating income is also known as earnings before interest and taxes or EBIT. Operating income or EBIT is commonly used to determine the overall success of the business.

INITIAL INVESTMENT

Start-up capital an entrepreneur uses to start their firm. It may include business owner's own money, borrowed money, or money raised by investors.

RETAINED EARNINGS

Profits generated by doing business. When a business owner keeps the profit in the business instead of taking out the extra money.

OPERATING INCOME

Companies generate positive operating income from its successful business operations. Operating income is sometimes called EBIT (Earnings Before Income and Taxes). The overall success of a business is often determined by the total of its EBIT.

ACCOUNTS RECEIVABLES

Accounts receivable (AR) is the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers. Accounts receivables are listed on the balance sheet as a current asset.

COMPANY STOCK

Company stock can be another form of internal funding. Other than a large infusion of venture capital, stock offerings are the fastest way for a successful business to scale up.

DEBT COLLECTION

Accounts payable are monies due to you. Many small business owners have a difficult time being a "debt collector." But the longer you wait to recover debt on delinquent accounts, the less likely you are to receive payment. Since it can be difficult to collect money on accounts that refuse to pay, many small businesses turn to collection agencies for help.

 

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