What is a company’s equity? The capital of a company is the set of assets that will be contributed to the company for the manufacture of other goods or services. Let’s say that it serves to generate value, benefits or profits through the money that is imposed or lent by partners or shareholders. Moreover, we also find different types of capitals, which are:
CAPITAL OF A COMPANY ACCORDING TO OWNERS
- Public: belonging to public entities, such as, for example, the Government.
- Private: belonging to companies or individuals.
ACCORDING TO THE CONSTITUTION
- Tangible: assets that can be touched, i.e. they are physical. Such as, for example, a truck or machinery.
- Intangible: in this case it cannot be touched, such as, for example, a company’s brand.
ACCORDING TO THE DEADLINE
- Short term: the main objective should be short term, normally within one year.
- Long term: it is invested with a profit projection of several years.
ACCORDING TO THEIR FUNCTION
- Fixed capital: assets held by a company for the long term, which are expected to be used within one year of purchase. For example: land, properties, etc.
- Venture capital: funds where investors have instruments or transactions with a high risk to develop a higher return or profit than normally sought. Because they seek results above and beyond the norm, they end up being called “risky” because they take a different course from traditional financing methods.
- Variable capital: it is the capital that varies according to the number of partners in it and the resources that have been put into it, i.e., the capital stock.
- Financial capital: the value of short-term investments in the form of stocks, loans and other assets. Moreover, they are usually carried out by other institutions.
What is a company’s equity?
Let us say that capital is goods or instruments whose purpose is to finance other goods or services. Therefore, the main objective is to make a profit from a productive activity in order to invest the money. In addition, capital is used to generate more value.
With Orama, you will be able to analyze your company’s cash flow and find out if you will have financing needs .
Book your demo with one of our specialists.