Definition of capital


  • 1 The concept of capital
  • 2 The concept of the capital market
  • 3 types of capital
  • 4 Capital investment
  • 5 Uses of invested capital
  • 6 References

The concept of capital

Known as the head of capital ( in English: Capital) as financial assets or the value of financial , such as funds held in deposit accounts, in addition to the tangible and used equipment in factory environments, manufacturing facilities, production, and capital includes facilities such as buildings used for storage of manufactured goods. [1]

The concept of the capital market

The capital market is defined as the place where buyers and sellers engage in securities trading, including stocks and bonds, and sales and purchases are made by participants, whether they are individuals or institutions. [2]

Types of capital

Types of capital include: [1]
  • Borrowed capital : This type includes the ability to obtain capital through debt, through several sources such as: friends, financial institutions, insurance companies and others.
  • Share capital : This type includes investments that do not need to be repaid, and includes investment from owners of companies in addition to the contributions derived from the sale of shares.
  • Working capital : This type is a measure of the company's short-term liquidity, and it shows the company’s ability to cover debts and accounts payable.
  • Commercial Capital : This type refers to the amount of money allocated for the purchase and sale of securities.

Capital investment

The capital is invested by operating it in a commercial project with the expectation of obtaining income, then recovering the capital through the profits made by the business over the years, and the capital is invested in capital expenditures and not in daily transactions or other expenses. [3]

The uses of invested capital

The invested capital is used to distribute the capital for long-term uses, and the companies invest continuous capital in order to maintain the company's current operations and expand future business, in addition to the main investment being in fixed assets in order to increase the operational capacity, and obtain the share Bigger than the market, and to generate more revenue. [4]

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