what is capital 
capital is a broad term that can describe anything that confers value or benefit to its owners such as a factory and its machinery intellectual property like patents or the financial assets of a business or an individual while money itself may be construed as capital capital is more often associated with cash that is being put to work for productive or investment purposes in general capital is a critical component of running a business from day to day and financing its future growth business capital may derive from the operations of the business or be raised from debt or equity financing when budgeting businesses of all kinds typically focus on three types of capital working capital equity capital and debt capital a business in the financial industry identifies trading capital as a fourth component learn more about the types sources and structures of capital investopedia matthew collinsunderstanding capitalfrom the economist s perspective capital is key to the functioning of any unit whether that unit is a family a small business a large corporation or an entire economy capital assets can be found on either the current or long term portion of the balance sheet these assets may include cash cash equivalents and marketable securities as well as manufacturing equipment production facilities and storage facilities in the broadest sense capital can be a measurement of wealth and a resource for increasing wealth individuals hold capital and capital assets as part of their net worth companies have capital structures that define the mix of debt capital equity capital and working capital for daily expenditures that they use capital is typically cash or liquid assets being held or obtained for expenditures in a broader sense the term may be expanded to include all of a company s assets that have monetary value such as its equipment real estate and inventory but when it comes to budgeting capital is cash flow in general capital can be a measurement of wealth and also a resource that provides for increasing wealth through direct investment or capital project investments individuals hold capital and capital assets as part of their net worth companies have capital structures that include debt capital equity capital and working capital for daily expenditures 