After reading this article you will learn about:- 1. Meaning and Concept of Capital 2. Types of Capital 3. Features. Meaning and Concept of Capital: Capital is the life-blood of a business enterprise. It is a universal lubricant which keeps enterprise dynamic. Capital designates physical sources when applied to production and (it means) money when applied to finance. Its meaning, [...]
After reading this article you will learn about over and under capitalisation of a company. Over-Capitalization of a Company: An over capitalized firm can be compared to a (fat) man who has got fat more than required and suffers from variety of diseases. Over-capitalization implies that the total capital of the company (owned capital plus borrowed capital) is in excess [...]
After reading this article you will learn about the treatment of reserve and surplus. Treatment of Reserve: Setting up of reserves for working capital are very necessary for sound financial administration in order: i. To cover credit losses; ii. To liquidate debts; iii. To offset price fluctuations on inventories; iv. To provide for improvement and expansion; v. For depreciation and [...]