What is capital?

Capital is an expression that includes the financial assets of an enterprise and fixed investment in machinery, buildings and other facilities, but does not include the value of any materials that will be used in the manufacture of products.

Where have you heard of capital?

Company reports and financial media often refer to "capital equipment" and the financing stocks and bonds issued by companies. Anyone concerned with economics understands the four elements of production, namely, land, labor, enterprise and capital.

What you need to know about capital...

All businesses need capital, but the amount varies. Compared to automakers or steel producers, service companies such as advertising agencies or cleaning companies require lower capital expenditures on cash, equipment and property. The enterprise may sell shares or. Share capital borrowing from banks or other lenders (I. E. Liabilities) to obtain capital, while small businesses save on past expenses by the founders to raise the capital needed to start the company.