What Does Capital Mean in Business? (2024)

FAQs

What Does Capital Mean in Business? ›

Capital is the money used to build, run, or grow a business. It can also refer to the net worth (or book value) of a business. Capital most commonly refers to the money used by a business either to meet upcoming expenses, or to invest in new assets and projects.

Capital in business refers to the sum of financial assets that are required to produce goods or services. These funds can be used to initiate operations, meet daily expenses, or grow and expand the business. Business capital has three broad categories: Seed capital.

Capital is a broad term that can describe anything that confers value or benefit to its owners, such as a factory and its machinery, intellectual property like patents, or the financial assets of a business or an individual.

Owner's capital, or owner's equity, is the amount the owner of a business has invested in it. It is sometimes described as owner's interest as the investment value represents an owner's stake in the business.

money for buying land, buildings, equipment, etc. that are used to produce products or provide services: The Education Department is asking for $217.9 million in capital funds for new schools. (Definition of capital funds from the Cambridge Business English Dictionary © Cambridge University Press)

Startup capital is the money raised by an entrepreneur to underwrite the costs of a venture until it begins to turn a profit. Venture capitalists, angel investors, and traditional banks are among the sources of startup capital.

The total amount invested in the business by the owner is called Capital. Excess of assets over the liabilities is known as Capital.

Capital is the money used to build, run, or grow a business. It can also refer to the net worth (or book value) of a business. Capital most commonly refers to the money used by a business either to meet upcoming expenses, or to invest in new assets and projects.

Examples from Collins dictionaries

Companies are having difficulty in raising capital. A large amount of capital is invested in all these branches. With a conventional repayment mortgage, the repayments consist of both capital and interest. Colmar has long been considered the capital of the wine trade.

Capital letters, also called upper-case letters , are larger than, and often formed differently from, lower-case letters . Capital letters are used at the beginning of a sentence or a proper name and may be used to show respect. Some examples are: “ T he dog barked,” D aniel, the L ord, and Q ueen E lizabeth.

What is working capital in business? ›

Working capital (sometimes referred to as net working capital) is the money your business needs to be able to operate from day to day. Basically, it's the cash you have left, after you account for money coming in and money going out over any given period.

What Is Capital Employed? Capital employed, also known as funds employed, is the total amount of capital used for the acquisition of profits by a firm or project. Capital employed can also refer to the value of all the assets used by a company to generate earnings.

Owner's equity can be calculated by summing all the business assets (property, plant and equipment, inventory, retained earnings, and capital goods) and deducting all the liabilities (debts, wages, and salaries, loans, creditors).

From a budgeting standpoint, capital refers to cash or liquid assets held or accumulated for expenses. But it can also refer to a company's other assets with value.

Capital is a broad term for anything that gives its owner value or advantage, like a factory and its equipment, intellectual property like patents, or a company's or person's financial assets. Even though money itself can be called capital, the word is usually used to describe money used to make things or invest.

Capital is also referred to as capital assets, which fall under two types: long-term assets, assets held for more than a year before converting to cash; and short-term assets, assets held for less than a year before converting to cash, often central to the day-to-day workings of a business.

Capital is a broad term for anything that gives its owner value or advantage, like a factory and its equipment, intellectual property like patents, or a company's or person's financial assets. Even though money itself can be called capital, the word is usually used to describe money used to make things or invest.

The capital means the assets and cash in a business. Capital may either be cash, machinery, receivable accounts, property, or houses. Capital may also reflect the capital gained in a business or the assets of the owner in a company.

Capital structure is the particular combination of debt and equity used by a company to finance its overall operations and growth.