Businesses that have been recently established or own few assets, as well as more established businesses that have made modest profits in recent years, will struggle to raise internal finance.
Weighing up the circumstances of the business is very important when considering the recommendation of internal finance.
Carefully consider the financial information that is presented within the case study material (e.g. cash flow forecasts, statements of financial position and statements of comprehensive income) and look for clues in the body of the case studies text such as the personal circumstances of the business owner or the nature of the business itself.
Then make justified assumptions about the likelihood of internal finance being suitable for the intended purpose.