Source of finance for Public sector organisations

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March 5, 2017 at 7:34 pm #375784
salman7
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Dear sir,
The Public Sector Organisations receive from both the normal sources (from the sales of stamps for a Post Office) that most businesses receive their money, but also from tax revenues and grants from the government. They will not have debt and equity and therefore the cost of capital (WACC) is irrelevant for these organizations. We just study their basics and their objectives in F9.
Can we say that the normal revenue collected by a listed company is a source of finance for that business? I think it will be part of working capital source of finance which is free of cost.
Best regards,
Laiq
March 6, 2017 at 6:22 am #375817
John Moffat
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The normal revenue leads to profit which is then part of the retained earnings. Retained earnings are the most important source of finance for any business (and not just for working capital).
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