In finance and business this word has many meanings. To the economist it means tools and machines which make it possible for a workman to increase his output. The expression national capital means the total quantity of buildings, railways, docks, factories,plant and machinery, and tools existing in a country at any given time. There is also a further definition of capital as industrial property or investments, a capitalist being an owner of such property and earning profits from his control of industrial enterprises.Another meaining of capital emerges in the relation of capital to finance. The capital of a commercial or industrial firm is, in a broad sense, the total of shares issued by it. But businesses may often use capital which is more than the debentures, or may obtain loans from their banks, or extended credit from the merchants who supply them, all these methods will increase the amount of capital which the business actually uses.
In the financial sense capital is practically the same thing as savings. A firm engaged in company finance is principally concerned with obtaining the savings.A firm engaged in company finance is principally concerned with obtaining the savings of private investors, in other that the money may be put at the disposal of firms needing capital
No comments:
Post a Comment