What Is Capital Gearing? Capital gearing is a British term that refers to the amount of debt a company has relative to its equity. In the United States, capital gearing is known as “financial leverage.” Companies with high levels of capital gearing will have a larger amount of debt relative to their equity value. The
What Are Capital Goods? Capital goods are physical assets that a company uses in the production process to manufacture products and services that consumers will later use. Capital goods include buildings, machinery, equipment, vehicles, and tools. Capital goods are not finished goods, instead, they are used to make finished goods. Key Takeaways Capital goods are
What Is Capital Growth? Capital growth, or capital appreciation, is an increase in the value of an asset or investment over time. Capital growth is measured by the difference between the current value, or market value, of an asset or investment and its purchase price, or the value of the asset or investment at the time it was acquired.
What Is a Capital Growth Strategy? A capital growth strategy seeks to maximize capital appreciation of an investment portfolio over the long term through an asset allocation geared to securities with high expected returns. Investors who use a capital growth strategy seek out companies and investments with the potential to grow at a higher rate
What Is a Capital Guarantee Fund? A capital guarantee fund is an investment in which the investor’s principal is shielded from any losses. With a capital guarantee fund, any losses experienced by the underlying investments are instead absorbed by the fund company. These funds therefore tend to invest the majority of their available capital in
What Is a Capital Improvement? A capital improvement is the addition of a permanent structural change or the restoration of some aspect of a property that will either enhance the property’s overall value, prolong its useful life, or adapt it to new uses. Individuals, businesses, and cities can make capital improvements to the property they own. Some
What Is a Capital Injection? A capital injection is an investment of capital into a project, company, or investment, typically in the form of cash, equity, or debt. Oftentimes, the word injection implies that the company or organization receiving funding may be in financial distress. However, the term may also refer more broadly to all types of one-off capital
What Is Capital Intensive? The term “capital intensive” refers to business processes or industries that require large amounts of investment to produce a good or service and thus have a high percentage of fixed assets, such as property, plant, and equipment (PP&E). Companies in capital-intensive industries are often marked by high levels of depreciation. Understanding
What Is Capital Investment? Capital investment is the acquisition of physical assets by a company for use in furthering its long-term business goals and objectives. Real estate, manufacturing plants, and machinery are among the assets that are purchased as capital investments. The capital used may come from a wide range of sources from traditional bank
What Is Capital Investment Analysis? Capital investment analysis is a budgeting procedure that companies and government agencies use to assess the potential profitability of a long-term investment. Capital investment analysis assesses long-term investments, which might include fixed assets such as equipment, machinery, or real estate. The goal of this process is to identify the option
