Capital

The term ‘capital’ refers to assets or resources owned by the business that will aid in generating income and be used for further development of the business.

Both cash funds, and money in the bank are considered as ‘capital’. Some other examples include:

  • Buildings
  • Land
  • Vehicles
  • Machinery
  • Equipment

Capital is also referred to as assets less liabilities. The amount of resources of value less any debts and money owed.

Lastly the term is also used to identify any owner investments, stock or shares in a company.

With so many ways to interpret the word ‘capital’, things can easily become confusing.

If unsure, bookkeepers and accountants are always on hand to help.

Monitoring capital is vital to understanding business finances, knowing what funds and resources are available, thus ensuring a business can continue to grow and develop.

Advertisement

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s