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Types of capital in a business

Answer Text:
Types of capital in a business:
-there are four types of capital:
.working capital
.borrowed capital
.capital owned
.capital employed
Working capital:
- these are resources in the business that can be used to meet the immediate obligation of the business. It is the difference between the total current assets and total current liabilities.
Working Capital = Total Current Assets – Total Current Liabilities
Borrowed capital:
- the resources brought into the business from the outside sources. They are the long term liabilities of the business.
Capital owned/Owner’s equity/Capital invested:
- this is the capital that the owner of the business has contributed to the business. It is the Net capital/Closing capital of the business
Capital owned= Total assets – Total liabilities.
Capital Employed:
- these are the resources that has been put in the business for a long term. Or
-it refers to total finance in the firm.
Capital Employed = Total Fixed assets + Working Capital
Or
Capital employed = Capital Invested + Long term liabilities.