Examples of Capital (Economic, Financial and Accounting)

He capital in accounting it refers to money or property (expressed in money) owned by a person or organization. They can be physical, such as machinery and buildings, or intangible, such as skills and knowledge. In this article, we will delve into the concepts of economic, financial and accounting capital and we will see examples of each.

For example, Mr. José Gómez owns a piece of land with a value of $1,000,000 dollars, a building of $2,000,000 dollars and $500,000 dollars in cash, therefore, its Capital is $3,500,000 Dollars.

In order to have a clear concept of the true meaning that Capital has in the study of accounting, next we explain what is understood by Capital in the three aspects can present, that is, the Economic capital, Financial capital and Accounting capital.

What is Economic Capital?

He Economic capital is a broad term that refers to all resources used to produce goods and services. These resources can be tangible, such as machinery and buildings, or intangible, such as skills and knowledge.

Economic capital is everything that helps us create value in the economy. The more capital an economy has, the more productive it will be..

Types of Economic Capital

1. Physical Capital: This type of capital includes all physical assets that are used in the production of other goods and services. Examples of physical capital include machinery, buildings, and vehicles.

2. Human capital: This type of capital refers to the skills, knowledge and experiences that individuals possess. Human capital is acquired through education, training and work experience.

3. Natural Capital: This type of capital includes natural resources that are used in the production of goods and services. Examples of natural capital include land, water, and minerals.

10 Examples of Physical Capital

1. Production machinery in a factory.
2. Office buildings where business operations are carried out.
3. Construction equipment used in infrastructure projects.
4. Vehicles used to transport goods and people.
5. Tools used by workers to perform their tasks.
6. Information technology equipment, such as computers and servers.
7. Infrastructures such as roads, bridges and airports.
8. Farm equipment used in agriculture.
9. Research and development teams used for innovation.
10. Real estate, such as shops and warehouses.

10 examples of Human Capital

1. Programming skills of a software developer.
2. Knowledge of a specialized doctor.
3. Experience of a project manager.
4. Skills of a craftsman.
5. knowledge of a teacher.
6. Communication skills of a seller.
7. Experience of a chef.
8. Leadership skills of a CEO.
9. knowledge of an engineer.
10. Linguistic skills of a translator.

10 examples of Natural Capital

1. Agricultural land used to grow food.
2. Forests that provide wood.
3. Rivers that provide water for irrigation and hydroelectric power generation.
4. Oil and natural gas deposits.
5. Mineral and precious metal mines.
6. Lakes and oceans that provide fish and other shellfish.
7. The sun, which provides solar energy.
8. The wind, which provides wind power.
9. Genetic resources used in biotechnology.
10. Biodiversity, which provides a variety of ecosystem benefits.

What is Financial Capital?

He financial capital refers to the financial resources used to start or expand a business. These resources may include cash, investments, and credit.

Financial capital is the money needed to start and maintain the operations of a business. Without financial capital, companies could not start operations, buy equipment, hire staff, or expand into new markets.

Financial capital can also help businesses survive during periods of low income.

Types of Financial Capital

Financial capital can take various forms. Here are the most common:

1. Own capital: This type of capital refers to the financial resources that the owners of a company have invested in it. Equity also includes retained earnings, which are earnings that the business has chosen to reinvest rather than distribute to owners.

2. Debt Capital: This type of capital refers to the financial resources that a company has borrowed to finance its operations. The debt principal must be repaid to the lender with interest.

10 examples of Own Capital:

1. Initial investment of the founders in a startup.
2. Retained earnings that are reinvested in the company.
3. Funds raised through an initial public offering (IPO).
4. Investments made by shareholders in a company.
5. Funds raised through a share issue.
6. Capital contributed by a partner in a partnership.
7. Investments made by a sole proprietor in his business.
8. Funds contributed by an angel investor in a startup.
9. Investments made by a venture capital fund in a company.
10. Funds raised through an issuance of preferred stock.

10 examples of Debt Capital:

1. Bank loan obtained to finance the operations of a company.
2. Bonds issued by a company to raise funds.
3. Line of credit obtained from a bank.
4. Short-term loans obtained to finance working capital.
5. Mortgage obtained to finance the purchase of a property.
6. Long-term loans obtained to finance the expansion of a business.
7. Loans obtained through the issuance of promissory notes.
8. Debt financing obtained through an issuance of convertible bonds.
9. Loans obtained from private investors.
10. Debt financing obtained through a corporate bond issue.

What is Stockholders' Equity?

He stockholders' equity It refers to the difference between a company's assets and liabilities. In other words, it's a company's net worth, or what would be left if a company sold all of its assets and paid off all of its liabilities.

Components of Stockholders' Equity

Stockholders' equity is made up of several elements, including:

1. Social capital: This is money that the owners have directly invested in the business.

2. Retained earnings: These are the profits that the company has decided to reinvest instead of distributing to the owners.

3. Bookings: These are the sums of money that the company has set aside for specific purposes, such as buying new equipment or expanding into new markets.

10 Examples of Social Capital

1. Initial investment of the founders in a startup.
2. Funds raised through an initial public offering (IPO).
3. Investments made by shareholders in a company.
4. Funds raised through a share issue.
5. Capital contributed by a partner in a partnership.
6. Investments made by a sole proprietor in his business.
7. Funds contributed by an angel investor in a startup.
8. Investments made by a venture capital fund in a company.
9. Funds raised through an issuance of preferred stock.
10. Capital contributed by the owners in a family business.

10 Examples of Retained Earnings

1. Retained earnings of a company that are reinvested in the company.
2. Earnings for a period that are retained for future investments.
3. Retained earnings that are used to pay debts.
4. Retained earnings that are used to finance the expansion of the company.
5. Retained earnings that are used to purchase new equipment.
6. Earnings for a period that are retained to increase the company's reserves.
7. Retained earnings that are used to finance research and development.
8. Retained earnings that are used to buy back shares of the company.
9. Retained earnings used to finance acquisitions.
10. Earnings for a year that are retained to increase working capital.

10 examples of Reserves

1. Legal reserves established by law in some countries.
2. Reserves for depreciation or amortization.
3. Reserves for future investments in fixed assets.
4. Reserves for the expansion of the company.
5. Reserves for research and development.
6. Reserves for the acquisition of other companies.
7. Reserves for contingencies or unforeseen events.
8. Reserves for the repurchase of shares.
9. Debt retirement reserves.
10. Reserves for the payment of future dividends.

Comparison between Economic, Financial and Accounting Capital

Although the terms economic, financial, and accounting capital may seem similar, each has its own set of characteristics and uses. Here is a comparison table to help you understand the differences:

Economic capital	Financial capital	Stockholders' Equity
Definition	It refers to the resources used to produce goods and services.	It refers to the financial resources used to start or expand a business.	It refers to the difference between a company's assets and liabilities.
Guys	Includes physical, human and natural capital.	Includes equity and debt capital.	Includes capital stock, retained earnings and reserves.
Importance	It is essential for the production of goods and services.	It is essential for the growth and expansion of companies.	It is an indicator of the financial health of a company.

I hope this article has helped you better understand the concepts of economic, financial and accounting capital. If you have any questions you can leave them in the comments and I will gladly answer you.