Sources of financing refer to the various avenues through which businesses and organizations acquire funds to meet their capital requirements. These sources can be categorized into internal and external sources. Internal sources include retained earnings, depreciation funds, and sale of assets, while external sources encompass debt financing, equity financing, government grants, and subsidies. Debt financing involves borrowing funds from creditors or financial institutions, whereas equity financing entails raising capital by selling ownership stakes in the business to investors. Each source of financing has its advantages and considerations, and businesses typically utilise a combination of internal and external sources to fund their operations, investments, and growth initiatives, ensuring optimal capital structure and financial sustainability.

Explain each category of sources of finance based on period and discuss with example the sources of generation.