Final answer:
Two things that can increase Owner's Equity are Investments and profits. While profits reinvested back into the business are a common way for established companies to raise capital, fledgling or struggling firms often seek funds from investors, loans, bonds, or stock sales.
Step-by-step explanation:
The two examples of things that can increase Owner's Equity are Investments and profits. Owner's equity can be increased through contributions from the owners, often referred to as investments, and through the earning of profits from business operations. On the other hand, things like expenses, withdrawals, and losses can decrease owner's equity, while assets and liabilities are components that make up the accounting equation (Assets = Liabilities + Owner's Equity) but do not directly increase the equity by themselves.
Firms seeking to finance large projects or investments may consider a variety of financial capital sources. Profits are a central source, especially for established companies that can reinvest these funds back into the business. However, for startups or during tough economic times, profits may not be sufficient or available. Consequently, firms may turn to early-stage investors, loans from banks, bonds, or the sale of stock to finance their ventures. Each financial decision impacts how the business operates and its overall financial structure.