# Self-financing, internal financing and endogenous financing (self-financing, in-house-financing, internal financing, auto-financing)

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- Post ID: 588759
- Modified: 2023-07-25T21:13:41+00:00
- Language: en

## Definition

Generally, in a company, the accumulation of money raised through its own economic activity. As a rule, undistributed profits are the source of self-financing. In addition, money also flows from the sale of assets - such as parts of a company: divestment; disinvestment - funds flow in. Another option is finance leasing. - Companies that are capable of self-financing on a larger scale have the opportunity to pursue business policy independently of banks and, as a rule, also of the supervisory board. It is disputed whether the risk of misallocation of capital increases in the case of self-financed companies compared with (partially) leveraged companies. However, it is generally seen as a risk if self-financing is made possible over longer periods of time due to rigid monopolistic or oligopolistic market positions in the absence of substitute competition (such as the German electricity industry). - See foreclosure, bootstrapping, financing, immunization, capital, internal, zero distribution, ranking theory, reserves, growth stocks, interest allocation function. - Cf. Deutsche Bundesbank Monthly Report, January 2012, pp. 18 et seq. (internal financing possibilities; empirical data). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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