What is your own capital?
The balance sheet of the company reflects the financial health of this entity. The capital itself, also referred to as capital, is an accounting term and is a main part of the balance sheet. It denotes part of the shares of the company owned by the company in connection with assets and obligations. Technically, the own capital of the owner of the equation is deducted by obligations from the total assets.
Own capital can be expressed in different ways. For example, it represents any debts that are owed to the owner of the company. It also reflects any investment of the company owner. For example, if the company's founder uses some of his own money, for example, the amount is stated in the so -called capital account or own owner's own account.
publicly traded companies issue a number of shares on public markets for investors who can buy and sell. Two primary types of shares are ordinary shares and preferred shares, although both grant investors partial Equvoving in the company. The number of outstanding shares, which is the originET shares held by investors are also considered part of the owner's own capital.
preferred shares of GRANTS shareholders the right to regular dividend payments for a predetermined rate. Common shareholders are municipal investors who receive dividend payments only as an advantage that decides every quarter. In the event that the Company is forced to liquidate, preferred shareholders are evaluated higher and have the right to their own capital before joint shareholders.
undivided incomes are another type of capital. These are profits generated and preserved by society over time. Instead of distributing these profits to investors in the form of dividend or using capital for expansion of society, earnings are left, which is increased by the owner of its own capital.
The owner's own share increases or decreases the course of time. Once the company begins to generate profits, these earnings withe count with their own capital of the owner. Capital, payments and dividend loss withdrawals cause a decrease in equity. In the United States, these changes must be reported in the balance sheet of the company within the generally accepted accounting principles, the accounting standard in the region.
Although the company owners have the right to capital to this entity, creditors. For this reason, it is necessary to deduct obligations or debts from the asset to determine the right of the owner to his own capital. In the event that the company fails and enters bankruptcy, its creditors, including debt holders, have the right to capital before the owner has the right to capital.