If you need to start a business then you will have to invest some of the capital. It is understood from this fact that something that you need to start a business is called capital. Capital may be in the form of money or without it.

Capital is also known as an asset that you use for your business. But when it comes to Capital must be understood as means of production with the help of which you are able to produce or manufacture goods. It can also be called as a capital good. Real capital is also a term used for capital but in the economic sense. A capital is issued for the creation of the goods as well as the services. Hence it is consumed for the production process. You may have your own capital or you can borrow from someone.

When it comes to capital goods, they can be garnered in the form of financial capital or in the form of money. Capital can be both physical as well as non-physical quantity. When all the physical capital is taken as a whole it is known as capital stock. These are the general assumptions for capital and one cannot distinguish the different types of capital in this regard. When an entrepreneur or a businessman needs to invest a certain amount of money for manufacturing products or creating the services then this money is known as financial capital.

One should not be confused between financial capital and the real capital. When the funds are provided to the investors and the by the creditors, so that they can buy the equipment related to the real capital for the producing of the services and goods, it is this capital whereas when the real capital is talked about, it is related to the economics and hence it is called economic capital. It comprises those things that assist in the p[production of other products. For instance when plastic is used to make toys or when sugarcane is used to make sugar. The wealth which is saved up is also referred to as the capital related to finance. When you talk about the capacity to produce of a particular asset, then it is the same capital, which is related to finance.

The measurement of financial capital is done in terms of the purchasing power of the investor or in terms of money. The maintenance of this type of capital is done with respect to three fundamentals. These include maintenance of the physical capital, maintenance of the capital in terms of the purchasing power and in terms of the currency (money) as well. This type of capital is the representative of wealth as well as of the types of capital. When a company produces extra wealth then this capital is said to be produced. A business organization is void without this capital and cannot be run without it. Hence, it holds great importance. There are various categories of this capital that include signaling capital as well as productive capital.

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