Capital

Capital* is 1. Self-expanding value. 2. Company’s property that is the book cost of the shares issued by it and accumulated net income. In the strict practical sense, ‘capital is the working source of income’ (the definition of one of English sources). ‘Working’ means invested in the business and yielding generally useful results. The excess of incoming funds over invested ones is earnings (compare Rent). Use of a part of the earnings for production extension (business development) is capitalization. Its remaining part is income. Sometimes capital is compared with the tree and income is compared with fruit. If this analogy is used, then according to laws of western countries the tree is not subject to taxes but its fruit, i.e. income, is taxed. As for the capital structure, see Capital of a Joint Stock Company and Business Capital.