Capital encompasses cash, equipment, real estate, and other assets that can be utilized to generate wealth. In finance, it is often categorized into equity capital, raised through the sale of shares, and debt capital, borrowed from lenders and repaid with interest. Effective management and allocation of capital are essential for businesses to meet their financial objectives and maintain long-term sustainability.
Capital Example
For example, a startup might secure $1 million in capital by selling shares to investors, which it then uses to develop its product, hire staff, and implement marketing strategies.