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.
