Business Assets

Types of Capital

Types of Capital Jonathan Poland

Capital is an asset that is expected to produce future economic value. It is a productive resource that is used by societies, firms, and individuals to create wealth and generate income. Overall, capital is a productive resource that is used to create economic value. There are many different types of capital, and each type plays a unique role in the economy.

Human Capital
Human capital are the talents and health of people that allows them to produce future value. Generally speaking, people don’t like to be referred to as capital. However, this is an important concept of economics that encourages investment in quality of life such as education and healthcare.

  • Cultural Capital
  • Health
  • Knowledge
  • Talent

Relational Capital
Relational capital is the value of relationships and social structures. For example, a firm with a million loyal customers has more productive potential than a firm with zero loyal customers. Likewise, social structures and systems such as society, culture and community all increase the economic prospects of people.

  • Community
  • Culture
  • Investor Relationships
  • Loyal Customers
  • Organizations
  • Partnerships
  • Society
  • Talented Employees

Natural Capital
Natural capital is any natural resource that has value. This is often destroyed due to a situation known as tragedy of the commons whereby firms and individuals don’t pay for their damage to these resources.

  • Air
  • Ecosystems
  • Forests
  • Geological Features (e.g. rocks)
  • Land
  • Minerals
  • Organisms
  • Water

Tangible Capital
Physical things build by humans that have productive potential.

  • Buildings
  • Computers
  • Equipment
  • Infrastructure
  • Machines
  • Vehicles

Intangible Capital
Non-physical things that have productive potential. This includes relational capital listed separately above.

  • Brands
  • Data
  • Knowledge
  • Patents
  • Software
  • Trademarks

Current Assets
The assets of a business that can be quickly converted to cash or that are intended to be sold or used within a business cycle.

  • Accounts Receivable
  • Cash
  • Inventory
  • Marketable Securities
  • Prepaid Expenses
  • Supplies

Financial Capital
Financial capital is cash, cash equivalents and assets with cash value. For a business, financial capital is often classified according to its source. Equity capital is cash that was raised by the investors who own the business. Debt capital are loans from creditors that are used as capital by the business.

  • Current Assets
  • Debt Capital
  • Equity Capital
  • Working Capital

Business Assets

Business Assets Jonathan Poland

In business, assets are useful property that are owned by the company. These assets can be divided into three categories: current assets, fixed assets, and intangible assets. Current assets are things like cash, marketable securities, and other assets that are expected to be converted to cash or consumed within a year. Fixed assets, such as buildings, machinery, and equipment, have a useful life of more than a year. Intangible assets are things that cannot be touched, such as the value of a brand, customer list, or trademark.

Some common types of business assets include:

  • Accounts Receivable
  • Bank Deposits
  • Buildings
  • Cash
  • Cash Equivalents
  • Communication Equipment
  • Computers
  • Concessions & Franchises
  • Construction Equipment
  • Cultural Assets
  • Debt Securities
  • Elevators
  • Equipment
  • Equity Securities
  • Fixtures
  • Furnishings
  • Goodwill
  • HVAC
  • Infrastructure
  • Interest Receivable
  • Inventory
  • Kitchen Equipment
  • Land
  • Land Improvements
  • Licenses
  • Loans, Advances & Deposits
  • Machines
  • Marketable Securities
  • Media Equipment
  • Mobile Devices
  • Musical Instruments
  • Natural Resources
  • Prepaid Expenses
  • Prepaid Taxes
  • Production Equipment
  • Property, Plant & Equipment
  • Raw Materials
  • Recreational Facilities
  • Research & Development
  • Rights
  • Safety Equipment
  • Satellites
  • Shipping Equipment
  • Ships & Boats
  • Signs
  • Software
  • Storage Systems
  • Supplies
  • Taxes Receivable
  • Tools & Dies
  • Trademarks & Patents
  • Transportation Equipment
  • Uniforms
  • Utensils
  • Vehicles
  • Work in Progress (goods in process)
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