(a) Retained Earnings: A company generally does not distribute all its earnings amongst the shareholders as dividends but a portion of the net earnings may be retained in the business for use in the future this is known as retained earnings. It is a source of internal financing or self financing or ‘ploughing back of profits’. The profit available for ploughing back in an organisation depends on many factors like net profits, dividend policy and age of the organisation. 

(b) Trade Credit: It is the credit extended by one trader to another for the purchase of goods and services. Trade credit facilitates the purchase of supplies without immediate payment. Trade credit is commonly used by business organisations as a source of short term financing. It is granted to those customers who have reasonable amount of financial standing and goodwill.

The volume and period of credit extended depends on factors such as reputation of the purchasing firm, financial position of the seller, volume of purchases, past record of payment and degree of competition in the market. Terms of trade credit may vary from one industry to another and from one person to another. A firm may also offer different credit terms to different customers.