What is capital?

Since ancient times, scientists have been arguing about what iscapital. At the moment there is no unambiguous definition that would suit everyone. Some hold the view that capital is a stock of goods and services or wealth. Others, answering the question of what capital is, say that it is a combination of means of production actively used in the production process.

In any case, it implies the availability of resources,with the help of which the entrepreneur receives income. Often people view capital from a monetary position, that is, it is the amount of money that ensures the acquisition of all the necessary equipment to start production activities. It is important to understand that only the resource that brings profit to the owner can be considered capital. For example, you have a good sewing machine - it's stock, resource, value, but not capital. They will become it only after the machine goes into the hands of a professional sewing workshop, that is, after introduction into production activities.

In addition, each entrepreneur isunderstand what capital is in accounting. It is expressed in a value equivalent, it can be calculated as the difference in the amount of assets and liabilities of the balance sheet. The capital of any enterprise or organization can be divided into two main groups:

- the main one;

- negotiable.

The first group includes such resources asparticipate in the production process for more than a year, gradually transferring its value to the cost of goods, which is subsequently included in its price in the market. The fixed capital does not change its material form, but in the financial statements it is marked in the column "fixed assets". An example of such resources can be buildings, transport, equipment, various buildings, and even inventory. Working capital means that group of means of production that participates in the process of manufacturing a new product within one cycle, usually less than a year, while changing its material-material form. The cost of these resources is fully included in the price of the finished product. As circulating capital are semi-finished products, raw materials and materials, cash and other.

Answering the question about what capital is,it is understood that these are means that are the property of the entrepreneur. But this will not always be true, since capital can be divided into own and borrowed. Own, in turn, is conditionally divided into:

• Warehouse;
• spare.

The first species is also called statutory, since itFormed at the time of formation of the company as a legal entity. And the term "warehouse" is explained by the fact that it can consist of separate contributions of participants. For example, the authorized capital of a bank, which is a joint-stock company, consists of separate shares of shareholders, who receive shares in return for the invested funds. Subsequently, they bring investors a stable income in the form of dividends.

According to the current legislation, eachThe enterprise in the course of its activity is obliged to create a reserve fund. It collects funds intended to cover possible losses in the event of adverse situations. Reserve capital gives confidence to the head of the company that the production will continue to work efficiently even in the event of unforeseen losses. This fund serves as a certain guarantee, therefore its formation is considered an important part of the organization of the company.

Recently,concept as an entrepreneurial capital. It includes all means and resources at the disposal of the businessman and designed to ensure the stable functioning of the firm. Entrepreneurial capital simultaneously satisfies the needs and desires of investors, personnel of the organization, the head, and even the state.