Capital

1. Financial accounting.

Money the business owes the owner.

This is equal to assets minus liabilities (including debt).

In other words, the equity.

2. Corporate finance.

More broadly in the corporate finance context, 'capital' is the total amount of funding available for the operations of a firm.

This would include both its debt and its equity.

3. Company law.

More narrowly in company law, 'capital' is the component of the total equity represented by the share capital of the company.

4. Regulation.

In the regulatory capital context, 'capital' means what the particular regulations say that it means.

Here as elsewhere, care and consistency in definitions is essential.

5. Economics.

'Capital' is one of the 'factors of production' in economics, the others classically being labour, land and enterprise.

In this context, 'capital' refers to the things that have been created to help in the production process, like machinery, factories and transport facilities. These things are sometimes known as 'capital goods'.

See also

• Assets
• Capital adequacy
• Capital intensity
• Capital mobility
• Capital structure
• Capital to labour ratio
• Capitalisation
• Capitalism
• Cost of capital
• Credit balance
• Debt capital
• Enterprise
• Equity
• Equity cost of capital
• Factors of production
• Finance
• Financial risk
• Interest
• Investment bank
• Labour
• Land
• Liabilities
• Regulatory capital
• Return
• Servitisation
• Share capital
• Working capital