When retained earnings are not enough to meet their long-term funding needs, businesses may be able to raise funds by

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Selling common stock is a common way for businesses to raise funds when retained earnings are not enough. This allows the business to bring in new investors who provide capital in exchange for an ownership stake in the company. Petitioning the government for a loan may be an option for some businesses, but it is not always available and typically comes with stricter terms and conditions than traditional loans. Purchasing additional assets may require significant upfront costs and may not be feasible for all businesses. Decreasing accounts payable may free up some short-term cash flow, but it is not a long-term solution for raising funds.

When Retained Earnings Are Not Enough to Meet Their Long-Term