Final answer:
Other financing sources differ from revenues in that they require external funding, often through borrowing or selling equity, rather than internal generation of funds through business operations.
Step-by-step explanation:
One characteristic that distinguishes other financing sources (OFS) from revenues is that OFS requires a firm to seek external sources of funding, such as borrowing from banks or issuing bonds, especially when there are insufficient profits to reinvest in business growth.
When firms have profits, they can use them to reinvest in equipment, structures, and research and development as a form of financial capital. However, when profits are low or non-existent, firms must turn to external sources of financial capital to maintain operations and invest in new opportunities, which commonly include borrowing through banks or bonds, or raising money from early-stage investors or by selling stock.
These external funds are distinct from revenues, as they often come with the obligation to pay interest or offer equity to investors, instead of being generated internally from the firm’s business activities.