1. Money
You can opt-out at any time. Please refer to our privacy policy for contact information.

Capital

By

Definition:

The term Capital has several meanings and it is used in many business contexts. In general, capital is accumulated assets or ownership. More specifically,

  • Capital is the amount of cash and other assets owned by a business. These business assets include accounts receivable, equipment, and land/buildings of the business.
  • Capital can also represent the accumulated wealth of a business, represented by its assets less liabilities.
  • Capital can also mean stock or ownership in a company.

Capital Used in Other Business Terms
Other associated terms which relate to the term "capital" are:

  • Capital gains are increases in the value of stock and other assets when they are sold.

  • Capital assets, which sounds like a redundancy

  • The capital structure of a business is the mix of debt and equity in the business balance sheet.

  • Capital improvements are improvements made to capital assets.

  • Venture capital is private funding (capital investment) provided by individuals or other businesses to new business ventures.

  • A capital lease is a lease of business equipment which represents ownership and is reflected on the company's balance sheet as an asset.

  • A capital contribution is a contribution of capital, in the form of money or property, to a business by an owner, partner, or shareholder. The contribution increases the owner's equity interest in the business.
Examples:
A common cause of business failure is not having enough capital.

©2014 About.com. All rights reserved.