A business needs assets to make profit. Therefore a business must raise capital for the money to invest in its assets. The seed capital comes from shareowners; they may invest additional money in the business from time to time after the business gets off the ground. Most businesses borrow money on the basis of interest-bearing debt instruments such as notes payable. Profitable businesses retain part or all of their annual earnings to supplement the money invested in the
business by their shareowners. (more…)
