234k views
5 votes
What are internal sources of cash?

1) Cash inflows from investing activities.
2) Cash inflows from operating activities.
3) Cash inflows from financing activities.
4) All of the above.

User Nth
by
7.5k points

1 Answer

3 votes

Final answer:

Internal sources of cash for a firm include cash inflows from operating activities, reinvesting profits, borrowing through banks or bonds, and acquiring funds from early-stage investors or selling stock.

Step-by-step explanation:

Internal sources of cash for a firm typically involve the generation of funds from within the company itself. The cash inflows from operating activities, such as the sale of goods and services, are a primary source. When a firm earns profits, it may reinvest these profits into the business for equipment, structures, and research and development, which can lead to further growth and cash inflows. Additionally, businesses can obtain internal cash through financing activities, which include borrowing through banks or issuing bonds, and potentially by obtaining funds from early-stage investors or by selling stocks. Therefore, the correct answer would be 'All of the above' as these are various ways in which a business can generate or acquire cash from internal mechanisms.

User Nathanpeck
by
7.5k points