ABSTRACT
The term “capital” is understood differently in financial management, accountancy, economics and the law. To a financial manager, capital represents the total o f the resources or assets o f the firm, over which there may be various creditor and proprietor claims.1 Accountants treat capital as the proprietor’s interest in the enterprise and consider all property rights or contractual claims, whether assets or liabilities, in determining the capital of the firm.2 In the accounting sense, capital encompasses the entire net worth o f the enterprise.3 It fluctuates with the firm’s current operations as the firm earns or loses money.4 Economists use the term “capital” to describe the total stock of machines and equipment that a society possesses and uses to produce goods and services.5
