Difference between Capital and Equity, Capital and equity are two terms used in finance and accounting, and while they are related, they have different meanings.
Capital refers to the financial resources of a company or individual, which can be use to generate income or invest in assets. It includes all the funds that have been invest in a business, such as owner’s investment, loans, and retain earnings.
Equitys, on the other hand, refers specifically to the portion of a company’s capitals that is own by shareholders. It represents the residual interest in the assets of a company after all liabilities are pay off. Equitys can be obtain by issuing shares to investors or retaining earnings and reinvesting them in the company.
In summary, capitals is a broader term that refers to all the financial resources of a business, while equity is a subset of capitals that specifically represents the ownership interest of shareholders.
