the total owned and borrowed funds in a business. Glossary of Business Terms
(1) Usually refers to the total of the equity accounts in a firm. For a bank, the equity accounts are common and preferred stock, surplus, and undivided profits. For other corporations, equity accounts are common and preferred stock, surplus, and retained earnings. For bank capital, see tier 1 capital and tier 2 capital.
(2) Sometimes used as a synonym for common stock, as in capital stock. American Banker Glossary
money invested in a firm. Bloomberg Financial Dictionary
The money that is invested in company. Financial Services Glossary

* * *

capital cap‧i‧tal [ˈkæptl] noun [uncountable]
1. ECONOMICS money or property used to produce wealth:

• Countries around the world are hungry for capital and economic development.

— see also return on capital
ˌcustomer ˈcapital
COMMERCE the value of a company's relationship with the people and other companies that it does business with:

• Companies have begun to take their customer capital seriously, and manage it as the asset it is.

ˌhuman ˈcapital ECONOMICS
people and their skills considered as a factor of production (= one of the things an economy or organization must have to create wealth):

• Governments must invest in health and education to develop human capital.

ˌintellectual ˈcapital HUMAN RESOURCES
the knowledge of the people working for a company, which can produce wealth:

• a service-oriented, information economy in which intellectual capital is the critical resource

ˌsocial ˈcapital ECONOMICS
the people working for a company, and their combined skills, knowledge etc, or the skills etc of people in a country as a whole:

• The Japanese are good at managing the social capital of large organisations.

2. FINANCE money from shareholders and lenders that can be invested by a business in assets in order to produce profits:

• There is a shortage of capital for the purchase of new aircraft.

• Since the stockmarket fall, companies have been prevented from raising capital by selling new stock.

• The company desperately needs a fresh injection of capital.

• The company has bought lots of land over the last few years, which ties up capital (= makes it unavailable for use ) as it waits to develop it.

ˌauthorized ˈcapital also authorised capital FINANCE
the largest amount of capital a company is allowed to have in the form of shares; = AUTHORIZED ISSUE; AUTHORIZED STOCK:

• To finance the expansion programme, the company doubled its authorised capital from 5 billion to 10 billion pesos.

ˌcirculating ˈcapital FINANCE
another name for working capital
ˈcore ˌcapital FINANCE
another name for share capital when talking about the capital of financial institutions:

• the proportion of the bank's total assets held as core capital

ˈdebt ˌcapital
FINANCE capital raised by Issuing bonds (= making them available for people to buy ) :

• If a firm raises debt capital by selling bonds publicly, then some sales costs will be incurred.

ˈequity ˌcapital FINANCE
capital in the form of shares, not debt:

• The company will issue 30 million new shares and raise its equity capital by £56 million.

ˌfixed ˈcapital FINANCE
capital invested in assets that produce goods or services, or the assets themselves; = FIXED ASSET:

• The replacement of fixed capital is usually accompanied by an increased production capacity because of advances in technology.

ˈflight ˌcapital FINANCE
capital sent abroad because of economic or political uncertainty:

• When Africa's flight capital comes home we will know that real recovery is in progress.

ˈissued ˌcapital FINANCE
capital in the form of shares already offered to and held by shareholders
ˈloan ˌcapital FINANCE
capital in the form of money lent to a company as loans, bond S, or debenture S, not shares; = DEBT:

• The Welsh Development Agency provides loan capital for industrial projects.

ˌnominal ˈcapital FINANCE
the total value of all the shares issued by a company, at the time when they were issued:

• Shares in 29 companies with a total nominal capital of US$1,600 million were to be traded on the exchange.

ˈoperating ˌcapital FINANCE
another name for working capital
ˈordinary ˌcapital FINANCE
a company's main class of ordinary shares on which dividend S are paid only after those on more important classes of shares:

• AT&T holds 91 million ordinary shares in the company, representing 18.6% of its ordinary capital.

ˌpaid-in ˈcapital also ˌpaid-up ( share) ˈcapital FINANCE
share capital for which money has actually been received from shareholders, rather than for shares not yet paid for or not yet Issued (= made available):

• The issue of new shares raises its paid-up capital to $620 million.

ˈpreference ˌcapital , preˈferred ˌcapital FINANCE
a special class of a company's shares, on which dividend S are paid before the dividends on ordinary shares, and whose holders are repaid before others if the company goes bankrupt
ˈrisk ˌcapital FINANCE
capital invested in a business activity that involves a lot of risk, but which may be very profitable; = VENTURE CAPITAL
ˈshare ˌcapital FINANCE
capital that a company has from investors who have bought shares:

• San Paolo said it plans to sell the shares, which represent 20% of the bank's share capital.

ˌsplit ˈcapital FINANCE
a way of dividing a trust company'S capital into two kinds of shares, capital share S and income share S
ˌTier 1 ˈcapital also ˌfirst-tier ˈcapital BANKING FINANCE
one of the two categories into which a bank's capital is divided, consisting of the most central and important types of capital. According to banking rules, banks must keep a certain amount of Tier 1 capital to protect them against failing:

• Tier 1 or `core' capital consists of common stock, retained earnings, and preferred stock.

• The agreement called for the bank to maintain Tier 1 capital of at least 6% of its assets.

ˌTier 2 ˈcapital also ˌsecond-tier ˈcapital BANKING FINANCE
one of the two categories into which a bank's capital is divided, consisting of the less important and central types of capital:

• Tier 2 capital includes securities and subordinated loans.

ˌuncalled ˈcapital FINANCE
capital in the form of shares that have been Issued (= made available to investors) but not yet paid for:

• the Company's property or assets, including its uncalled capital

unˌissued ˈcapital FINANCE
shares that a company is allowed to issue but has not issued yet:

• options on the unissued share capital

ˈventure ˌcapital FINANCE
money lent to someone so that they can start a new business; = RISK CAPITAL:

• The fund provides venture capital and loans for US business projects.

• Pullman has borrowed heavily from banks and venture capital companies.

ˌworking ˈcapital ACCOUNTING
money used by a business to carry on production and keep trading, for example to pay employees and suppliers before money is received for goods sold:

• We will have to make our entire technical staff redundant because we have run out of operating capital.

• the need for working capital to expand operations

* * *

   Economists define capital as assets, other than labour and land, that are required for production. In financial markets capital refers to the financing instruments used principally to acquire capital goods -in particular it refers to debt instruments and equity.
   ► See also Debt, Equity.

* * *

capital UK US /ˈkæpɪtəl/ noun
[U] FINANCE, ECONOMICS money that is used for investment or for starting a business: attract/borrow/raise capital »

Low-tax policies are used by some countries to attract capital.

invest/inject capital »

The UK parent company decided not to inject further capital into the failing business.


foreign/private capital


Investors are finding that there has been a satisfactory return on capital.

[U] ACCOUNTING, FINANCE the total amount of money and property that an individual or company owns: tie up/release capital »

Most of our capital is tied up in property.

[U] FINANCE, ECONOMICS money that is lent or borrowed and will have to be paid back: »

Our mortgage is interest-only, so we're not paying off any of the capital.

[U] ECONOMICS, POLITICS people who own the businesses, land, industries, and other forms of wealth in society, considered as a group: »

There's a real conflict arising between the demands of capital and labour.

[C] (also capital city) the city where a country or state has its central government: »

What's the capital of China?

See also AUTHORIZED SHARE CAPITAL(Cf. ↑authorized share capital), CALLED-UP SHARE CAPITAL(Cf. ↑called-up share capital), CIRCULATING CAPITAL(Cf. ↑circulating capital), CORE CAPITAL(Cf. ↑core capital), COST OF CAPITAL(Cf. ↑cost of capital), CUSTOMER CAPITAL(Cf. ↑customer capital), DEBT CAPITAL(Cf. ↑debt capital), EQUITY CAPITAL(Cf. ↑equity capital), FIXED CAPITAL(Cf. ↑fixed capital), FLIGHT CAPITAL(Cf. ↑flight capital), HUMAN CAPITAL(Cf. ↑human capital), INTELLECTUAL CAPITAL(Cf. ↑intellectual capital), KNOWLEDGE CAPITAL(Cf. ↑knowledge capital), LOAN CAPITAL(Cf. ↑loan capital), NOMINAL CAPITAL(Cf. ↑nominal capital), OPERATING CAPITAL(Cf. ↑operating capital), ORDINARY CAPITAL(Cf. ↑ordinary capital), PAID-IN CAPITAL(Cf. ↑paid-in capital), PREFERENCE CAPITAL(Cf. ↑preference capital), PREFERRED CAPITAL(Cf. ↑preferred capital), RETURN ON CAPITAL(Cf. ↑return on capital), RISK CAPITAL(Cf. ↑risk capital), SHARE CAPITAL(Cf. ↑share capital), SOCIAL CAPITAL(Cf. ↑social capital), TIER 2 CAPITAL(Cf. ↑Tier 2 capital), UNCALLED CAPITAL(Cf. ↑uncalled capital), VENTURE CAPITAL(Cf. ↑venture capital), WORKING CAPITAL(Cf. ↑working capital)

Financial and business terms. 2012.


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