Equity-capital: An Introduction
October 26th, 2009
Copyright © 2009 Integrated Profitability TM
The “Small Business Finance & Profitability” (SBF&P) blog has received a request to cover “capital”:
“Good! Finally all of this is coming together for me. How about more on capital? What is it? where does it come from, is it actual & stored somewhere physically and separately or virtual like the net or sum of two or more numbers?”
“Capital” is a great topic and one the SBF&P blog hasn’t touched upon. Not even gotten close, although passing reference has been made to it from time to time. Capital is a critically important part of a company’s financial books. However, it can be somewhat esoteric; which means, it will take a few blogs to define, explain and clarify what capital is, why it is important and how it can be used.
This first article will be an introduction, providing a definitional foundation for more detailed articles in the future.
The prospect of a series of articles on financial capital will no doubt send some people screaming for any button on your keyboard that will return you to where you came from, close the browser or shut-down your computer. A pity.
To begin the discussion of capital, an introduction is in order. Of all the financial statements created to report on companies, two stand head-and-shoulders above the rest:
● The Income Statement
● The Balance Sheet
These may trigger big yawns for many, but do your best to stifle them. If these two reports don’t raise your heart rate, hang in there. Things get better. Trust me: I’m in finance.
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