Understanding and Classification of Business Capital

Posted by Imam Larh on Friday, 27 April 2018

Understanding and Classification of Business Capital
Understanding and Classification of Business Capital
Weaccounting - Hello Buddy Weaccouting back again on this one blog, this time I share information about "Understanding and Classification of Business Capital".

When you want to build a business, surely it takes a small capital to start a business. To be able to achieve business goals, one of them is Creating a mature financial plan, which is about capital and financing.

To make or establish a business requires the existence of money and labor. Capital in the form of money is needed to finance the necessary for the business.

While there is also capital in the expertise or ability, Capital expertise is Expertise in a capability owned by someone to processor run a business. And the first capital out is to finance the establishment of a business from the very necessary to the company or business it so.

Understanding Business Capital
Business capital, in general, is money that can be used for business management activities either in terms of cost or the other. However, in fact, the notion of business capital is not only limited to amount money but also includes the goods used to manage a business.

Here is Understanding venture capital according to expert Expert.

  1. According to Prof. Polak, capital is the power to use capital goods listed on the balance sheet next to the credit. Adapaun which is meant capital goods is existing in a company or business that has not been used.
  2. Menuruf Prof. Bakker, capital is in the form of concrete goods that still exist in a business or company that is recorded on the trial balance next to the debit.
  3. According to Alam S, capital is the most durable product resource that can be used as a productive input in the next production process.
Classification of Capital
What has been described above, in running a business, and there are supporters of a capital. If you start a business by building a house, then it takes the capital to be part of the foundation of the house to be built.
Read Also: How to start a business

Broadly speaking the capital is divided into two namely the active capital and passive capital.

1. Active Capital
According to the length of active capital can provide services in the production process, therefore the active capital is divided into two namely as follows.

A. Current Capital is a capital that provides services only once in the production process such as raw materials.

B. Fixed capital is a capital that provides services for long-term production processes such as land, buildings, and machinery.

According to the form of its assets, the active capital is divided into two as follows.

A. Capital of goods is a capital whose assets are tangible objects and rights to a number of goods such as buildings, land, and machinery.
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B. Capital money is an asset in the form of means of payment and the right to sejumblah bill of money such as cash, deposits dibank, ppiutang and notes receivable.

According to fixed tertanamnya active capital in business entities, the active capital is divided into two namely.

A. Constant capital, ie capital that always remain large in a business entity. Like the ground.
B. Capital Variable, ie capital that is embedded in the company and is not fixed jumblahnya.

According to the rentability of the business entity, the active capital is divided into two namely.

A. Capital used in the company. For example in Garment company.
B. Capital used outside the company. For example in stocks in the company that if can be profitable.

2. Passive Capital
Passive capital is the company's venture capital seen by the source of the capital. Passive capital is divided into two, namely as follows.

A. Capital itself is the capital that the owners give to the business entity.
B. Foreign capital is capital derived from outside the company, either in the form of loan capital or accounts receivable.

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