Capital

1. The total value of the assets of a person fewer liabilities.
2. The number of the proprietors’ interests in the assets of an organization. less its liabilities.
3. The money contributed by the proprietors to an organization to enable it to function; thus share capital is the amount provided by way of shares and the loan capital is the amount provided by way of loans. However, the capital of the proprietors of companies not only consists of the share and loan capital. it also includes retained profit, which accrues to the holders of the ordinary shares. See also RESERVE CAPITAL.
4. In economic theory. a factor of production, usually either machinery and plant(physical capital) or money (financial capital). However. the concept can be applied to a variety of other assets (see HUMAN CAPITAL). Capital is generally used to enhance the productivity of other fac­tors of production (e.g. combine harvesters enhance the productivity of land; tools enhance the value of labour) and its return is the reward following this enhancement. In general. the rate of return on capital is called *profit.