Capital refers to the financial resources, assets, or wealth owned or controlled by an individual, business, or entity. It encompasses various forms, including money, property, machinery, investments, and other tangible or intangible assets that hold value.
There are different types of capital, each serving a specific purpose:
- Financial capital: This includes cash, funds, and other monetary instruments that a business or individual possesses.
- Human capital: This refers to the knowledge, skills, expertise, and capabilities of individuals in an organisation.
- Physical capital: This encompasses tangible assets like buildings, machinery, equipment, and infrastructure that are used in production or operations.
- Intellectual capital: This comprises intangible assets such as patents, trademarks, copyrights, and proprietary knowledge.
- Social capital: This refers to the networks, relationships, and social connections that individuals or organisations have.
- Natural capital: This encompasses the natural resources and environmental assets that provide value to businesses and society. It includes elements like land, water, minerals, and ecosystems.
Capital plays a crucial role in the functioning and growth of businesses and economies. It allows businesses to invest in new ventures, expand operations, hire employees, and innovate.