Capital is the basis for the creation and development of the company.During operation of the company, it provides the interests of the staff, the owners and the state.Any company engaged in a particular activity must have a certain capital, which is a combination of cash and values necessary for economic activity.
Depending on accessories specific enterprise funds can be own or borrowed.
Equity - is the value of all assets of the company that owns the rights to her property and used to form the portion of the assets.They can operate on an economic entity for transactions without any reservations.Own funds are different in content, the principles of formation and use of sources of funds: extension, reserve and equity.The structure of the equity also includes retained earnings;Special funds and other reserves, as well as government subsidies and gratuitous receipts.The main sources of generating its own funds is the net profit after tax and dividends and the funds of the owners invested in the company's authorized capital.The amount of authorized capital is designated in the statute or in the founding documents.And to change this amount can only be in accordance with the results of the company over the past year and the resulting data changes in the constituent documents.Equity capital (share capital, share fund) of the enterprise determines the minimum size property of the organization that will ensure the interests of its creditors.Thus, own funds must not be shorter than the statutory fund.
Equity - is to some extent the formation of the source of funds that are used now to achieve certain goals.
in equity allocated 2 main components: capital that has been invested in the organization of the owners (invested), and the capital that has been created over the original owners of the advanced enterprise (accumulated).
Invested funds are formed by the preferred and common shares.In addition, it included additional paid-in capital and the value obtained for free.The accumulated funds are formed in the distribution of net profits.As a result, shareholders' equity, for example, the equity of the bank or trading company, will vary depending on the performance of the company.
the equity
estimate of its own funds - an important analytical parameter.In that case, if the organization has no obligations to creditors, then the value of the assets of the company is equal to equity.If, however, the company has commitments, while shareholders' equity - is the amount of assets net of liabilities.Therefore, the value of equity and net assets is called.
aggregate net asset value of the organization is determined on the basis of the annual balance sheet in accordance with established procedure.Valuation is in addition to the annual report of changes in equity.
As a result, we can conclude that the equity capital - it means businesses that used to form the portion of the assets.The amount of own funds may vary depending on the performance of the organization (loss of profits) and is determined by the value of company assets minus liabilities to creditors.
