Net worth

Capital Company is a collection of tools that can manage the company for its activities from the practical purpose of profit.

By source formation allocated assets of equity and debt.The main role is played here is a private part of the assets, ensuring the economic independence of the organization.

net worth reflects the total cost of funds belonging to the enterprise the right of ownership and free to use in forming part of the assets.Own part of the total capital represents the net assets of the company or organization.

Equity companies include various sources of resources: the charter, reserve, additional paid in capital.In addition, it included the undistributed profits, separate funds earmarked and other reserves.In addition to equity are all gratuitous receipts and subsidies allocated by the state.

The authorized capital is prescribed in the Charter and other constituent documents of the legal entity.Dobavochnyy- is all property contributed by founders in excess of the authorized and the am

ount remaining in the revaluation of property, and other income.The reserve is allocated from profit to cover potential losses and damages.

main source of savings is the property of the enterprise retained earnings remaining on gross profit after payment of taxes and charges on the other demands.

special purpose funds represent net income, which is directed to the expansion of the enterprise, industrial development and social activities.

Under other reserves refers to reserves established in connection with the expected large expenditures, which are included in the cost, as well as all costs of treatment.

Equity Company is divided into two key components - it is invested and the accumulated capital.

invest part - funds invested by the founders (owners) in the enterprise.It includes the nominal value of the shares (common and preferred) and additional paid-in assets.They also include free from various sources of value.

The balance of the funds invested is recorded as share capital, part - as an additional (resulting share premium), part - as an additional (donated received or transferred property) or fund social services.

Accumulated part - funds in excess of the originally advanced by the owners.This is often reflected in the articles appearing in the allocation of net income (that retained earnings, capital reserves, other similar articles).

Equity Company has the following positive features:

  • ease of attracting (depending on the owners and requires no coordination with other economic entities);
  • high possibility of generating income (does not require payment of interest on loans);
  • ensure financial stability of the organization in the long term and reduce the risk of bankruptcy).

However, it has its disadvantages and:

  • limitation of the volume of attracted funds;
  • high price compared with borrowed sources;
  • unused likely to increase profitability at the expense of borrowed funds.

Overall, the company uses only the equity, is the most financially stable, but the pace of its development constrained by the non-profit opportunities of growth in the fixed capital of the enterprise funds.