definition of capital capital

PieMan

I seem to get conflicting definitions for capital. Sometimes short term debt would be included in the term "capital" while other times STD would be excluded like in the LTD to Capitalization ratio. Can someone clarify this for me?

Thanks!

Houjichasan

has been discussed ad nausem. Capital is defined as interest-bearing debt plus equity. So short term debt is probably interest bearing (notes payable), so you would include that

Kapie

From Investopedia: Capital is an extremely vague term and its specific definition depends on the context in which it is used. In general, it refers to financial resources available for use.

I like to think of capital (generally) in two ways: 1.) Capital is the total assets of the firm (ie. liabilities + equity), or 2.) Capital as (debt + equity), or a firm's "capital struture."

The different capitalization ratios help you to analyze different components of "capital."

Good luck!

ayaz_mahmud369

for purposes of CFA it is debt+equity+preferred equity.

for real world, it is slightly different and longer than i want to type here.

giants2010

i think you answered your own question while asking it...

TOTAL capital includes STD.

LTD/Capitalization is what it says, a ratio looking at LTD. Therefore there is not STD included in the ratio