Definition:

Capital refers to the financial resources available to a business or individual. It can be used to invest in assets, expand operations, or pay off debts.

Types of capital:

  • Equity capital: Money invested by the owners of a business.
  • Debt capital: Money borrowed from lenders, such as banks or bondholders.
  • Working capital: The short-term assets and liabilities used in a company’s day-to-day operations.

Why is capital important?

  • Business growth: Capital is essential for businesses to grow and expand.
  • Investment: Capital can be used to invest in new projects or assets.
  • Debt repayment: Capital can be used to pay off debt.
  • Financial stability: A strong capital base can help a business to weather economic downturns.

In essence, capital is the financial resources available to a business or individual, and it’s essential for growth, investment, and financial stability.