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Capital – What is capital?

Definition: Capital is usually cash or can be other assets introduced into the business by the owners.

The term "capital" has several different meanings. Here are a few:

  • Capital is the amount of cash and other assets owned by a business.
  • Capital can also represent the accumulated wealth of a business, represented by its assets less liabilities.
  • Capital can also mean stock or ownership in a company.

Associated terms

Other associated terms which relate to the term "capital" are:

  • Capital gains, which are increases in the value of stock and other assets when they are sold.
  • The capital structure of a business is the mix of debt and equity in the business balance sheet.
  • Capital improvements, which are improvements made to capital assets.


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