1. Financial Capital: The most well-known form of capital, financial capital refers to the funds that companies employ to invest in assets or cover expenses. Cash, bank accounts, investments, and other financial tools are all included. Financial capital is demonstrated by a business taking out a loan to buy equipment.
2. Intellectual Capital: The information, abilities, and expertise that a company holds are referred to as intellectual capital. It covers trade secrets, copyrights, patents, and trademarks. Apple’s distinctive software and product designs are an illustration of intellectual capital.
3. Human Capital: Employees’ skills, expertise, and experience add value to a company through their labor. Human capital is exemplified by a highly talented software engineer who develops a new program that brings in money for a business.
4. Social Capital: The connections and networks that a company has with other companies, groups, and people are referred to as social capital. Partnerships, teamwork, and social ties are all part of it. Social capital is demonstrated by a company that has a wide network of distributors and suppliers.
Illustration: One example of natural capital is a business that grows crops using sustainable farming methods.
6. Manufactured Capital: A company’s manufactured capital consists of its tangible assets, such as its buildings, machinery, and equipment. An illustration of manufactured capital is a manufacturing company that uses specialized equipment to make its products.
7. Cultural Capital: A company’s and its employees’ cultural capital is their shared set of values, traditions, and beliefs. Language, traditions, and social standards are all part of it. Cultural capital is exemplified by organizations that value diversity and inclusion in the workplace.
These are just 5 instances of capital: Cash, patents, and employee skill sets come first. 4. Online community 5. The earth and its resources
The capital account of a company may be impacted by a variety of elements, such as earnings, losses, investments, and financing operations. Changes in the ownership structure of the company, like a merger or acquisition, can also result in changes in the capital account.
Since a capital account pertains to a company’s financial records, it is regarded as real capital as opposed to personal capital.
When capital accounts are fixed, all adjustments to reflect changes in revenue, expenses, and gains or losses are made in the income statement. The balance sheet, which displays the updated value of the company’s assets and liabilities, is then updated to reflect these revisions.