What is your own capital?

Of the three main components that make up the company's balance sheet, the shareholders' capital is the one that represents the assets that make up the value of the company if it should move from business today. From the accounting point of view, it is represented as a total assets of minus its total obligation. The capital itself consists of money that has been invested in society over time, plus all the undivided earnings that have accumulated. It can also be referred to as the company's own capital or accounting value and usually concerns the value of equity from the ordinary shares.

The company's owners are its shareholders who have invested money to purchase shares of the company's shares. The value of the shareholder's own capital in the balance sheet of the company is the amount of money available to them if the company closed and immediately liquidated its assets. This value does not necessarily reflect the market value of the Company; Expectations that the company will grow in the future and generate more income, partShe makes her shares more valuable than what investors originally paid for it. Those investing in the company for its growth potential may therefore be less likely to make decisions on the value of shareholders than at market value and potential.

Accountants consider the total assets of the company to consist mainly of two components: equity and shareholders' obligations. There are other possible components, including the value of any preferred stock and intangible assets, including Goodwill, although not all companies can have them. If these values ​​together with obligations are deducted from the total value of the company, the remaining part is considered to be shareholders.

Two primary capital sources that make up their own capital and undivided earnings. Investments may include the money that has been inserted into the company when originally created, plus other means that could be invested afterall life of society. Any capital that was devoted to society would also be included. Entired earnings are the money that the company has generated from business over time. Factors such as the age of society, its net income over the years, and how much it has been in dividends, determines whether undivided profits or investments make up most of their own shareholders' capital.