Question

Kartik has been successfully running business a financial consultancy company for the last five year. His company has become popular and enjoy good reputation. It has sufficient reserve of profit accumulated from last five year. He plans now to start branches in Bangalore and Mumbai also. For expanding business does not want any additional liability. In the above context:
1 .Suggest the source of finance suitable to Kartik for expansion.
2. Give ant two feature of that source. ​

Answer 1

Answer:

1. Retained earning

Explanation:

amount of profit a company has left over after paying all its direct costs, indirect costs, income taxes and its dividends to shareholders

Answer 2

Answer:

1. Kartik can use the accumulated profit money as a source to expand his business at two different cities.

2. The most important advantage of utilising this resource is he need not take loan from any bank. what are the money left over through the profit of his business he can utilise that money to start new branches in Bangalore and Mumbai.

One more advantage is their is no need to repay the amount to anyone , so he can also take calculative risk to expand his business.