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Company management is responsible for establishing a capital structure for the corporation that makes optimal use of financial leverage and holds the cost of capital as low as possible. [ 1 ] [ 2 ] Capital structure is an important issue in setting rates charged to customers by regulated utilities in the United States.
Capital management can broadly be divided into two classes: Working capital management regards the management of assets that are of capital value to the firm or business entity itself. Investment management on the other hand concerns assets that are alternative sources of revenue and normally exist outside of the main revenue model(s) of ...
In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. [1] A typical example is the machinery used in a factory. At the macroeconomic level, "the nation's capital stock includes buildings, equipment, software, and inventories during a ...
Financial capital — this is simply the amount of money the initiator of the business has invested in it. "Financial capital" often refers to his or her net worth tied up in the business ( assets minus liabilities ) but the phrase often includes money borrowed from others.
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
Capital budgeting in corporate finance, corporate planning and accounting is an area of capital management that concerns the planning process used to determine whether an organization's long term capital investments such as new machinery, replacement of machinery, new plants, new products, and research development projects are worth the funding of cash through the firm's capitalization ...
Financial capital (also simply known as capital or equity in finance, accounting and economics) is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services to the sector of the economy upon which their operation is based (e.g. retail, corporate, investment banking).
In Thurow's theory, the aim of business is to maintain the capital stock. In Marx's theory, competition , desire and market fluctuations create the striving and pressure to increase the capital stock; the whole aim of capitalist production is capital accumulation , i.e. business growth maximising net income.