In Marxian theory, variable capital refers to a capitalist's investment in labor-power, seen as the only source of surplus-value. The buying/selling is undertaken by participants such as individuals and institutions. In general, capital structure is the amount of equity and the amount of debt on hand at a given company. Other definitions state that capital is the financial value of assets such as funds held in accounts or cash on hand. What Does Cost of Capital Mean? Capital is a factor of production, along with labor and land. Meaning . Definition of Capital Expenditure. Capital may be physical or tangible or intangible. Investment is closely related to saving, though it is not the same. Additionally, capital in economics is tangible assets including machinery and equipment used to produce goods. [8][non-primary source needed], Already-produced durable goods that are used in production of goods or services, Glossary of Terms, "Capital (capital goods, capital equipment). Capital Gain/loss: Capital gain is the profit one earns on the sale of an asset like stocks, bonds or real estate. "Capital" entered English usage in the mid-sixteenth century, from origins in Latin Languages:. Terms and conditions means: these terms and conditions. These terms lead to certain questions and controversies discussed in those articles. Capital is that part of wealth which can be used for further production of wealth. The Cambridge, UK economists, including Joan Robinson and Piero Sraffa claimed that there is no basis for aggregating the heterogeneous objects that constitute 'capital goods. If there are increasing resources of capital in a country, it results in technological discoveries, raises productivity of labor, increases the rate of economic development and provides higher standard of living for the masses. Since capital is defined by him as being goods of higher-order, or goods used to produce consumer goods, and derived their value from them, being future goods. It gives a summary of the net flow of both private and public investment into an economy. ... With more produced at every price, the supply curve will shift to the right, meaning an increase in supply and a decrease in prices. There are several classifications of capital in economics, which many company accountants divide into two categories: Physical Capital– This category of capital is created by a labor force and is one of the factors of production. In more contemporary schools of economics, this form of capital is generally referred to as "financial capital" and is distinguished from "capital goods". In finance and accounting, capital generally refers to financial wealth, especially that used to start or maintain a business. In economics, the term capital stock is approximately interchangeable with the terms capital goods, real capital, or capital assets.By any of these names, capital stock items are already-produced, durable goods or any non-financial asset that works for the production of goods or services. The normal wear and tear on any asset cause the asset to lose some of its value. For an enterprise, both were types of capital. Capital formation means increasing the stock of real capital in a country. There is also a literature of intellectual capital and intellectual property law. All other inputs to production are called intangibles in classical economics. Buildings, machinery, and equipment are all examples of capital goods. The total amount of stock authorized for issue by a corporation, including common and preferred stock. Capital goods yield valuable production services over time. Human development theory describes human capital as being composed of distinct social, imitative and creative elements: This theory is the basis of triple bottom line accounting and is further developed in ecological economics, welfare economics and the various theories of green economics. Economic capital is the amount of capital that a company needs to survive any risks that it takes. Karl Marx adds a distinction that is often confused with David Ricardo's. Capital is distinct from land and other non-renewable resources in that it can be increased by human labor, and does not include certain durable goods like homes and personal automobiles that are not used in the production of saleable goods and services. by a firm, industry or economy at any one point in time (see POTENTIAL GROSS NATIONAL PRODUCT). [3][4] Adam Smith provided the further clarification that capital is a stock.
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