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The paid up capital shows the strength of the company internally. As the paid up capital is usually internally generated and not borrowed a higher paid up shows the strength of the company from the inside- the shareholders contribution as against a company with high external borrowing - that shows higher gearing and risk.
Thus, in short a company with lower gearing is much more safe and stable in the long run compared to a company with a higher gearing ratio
What else can I help you with?
What is the formula of asset backing ratio?
Book Value of Shares divided by paidup Valur of Shares.
What is the importance of social overhead capital?
To invest in Social Overhead Capital is very important in any economy. Because it helps you in getting out from the Vicious Circle Of Poverty. A country should invest at least 30% - 40% of the GDP in Social Overhead Capital.
What is the importance of working capital?
Working capital is very important concept in finance. Working capital represents the funds available with the company for day to day operations. working capital finances the cash conversion cycle. company cannot survive with negative working capital which represents that the company has no funds for day to day operations Essentially working capital is the answer to the question: "How much short term funding do you need to operate this business?". Short term funding is important because, with long term funding already in place, the business still needs short term funding to operate. Without the short term funding, the business will go bankrupt. Another concept is net working capital which means surpuls of current assets over current liablities. a positive NWC is good for a company
What is contributed capital?
Capital received from investors for stock, equal to capital stock plus contributed capital. also called contributed capital. also called paid-in capital.
Difference between issued share capital and equity share capital?
The authorised capital which is issued to the public is known as issued capital equity share capital is one of the class of capital
What is paidup capital?
The amount of a company's capital that has been funded by shareholders. Paid-up capital can be less than a company's total capital because a company may not issue all of the shares that it has been authorized to sell. Paid-up capital can also reflect how a company depends on equity financing.
What is the formula of asset backing ratio?
Book Value of Shares divided by paidup Valur of Shares.
What is the importance of capital budgeting?
the various types of working capital
What is the importance of Banjul in Gambia?
It is the capital city
What is the importance of foreign capital inflows to the namibian economy?
The importance of the foreign capital inflows to the Namibian economy is that the foreign exchange is used for both the imports and exports. The foreign capital inflows is therefore very important.
How do you explain cost of capital and its types?
Explain the term cost of capital and its importance in investment decision
What is the importance of the capital of the united states?
The capital of the US, and any country, has great importance. It is the head of government for the country and almost all official business is conducted here.
What is the importance of muscat?
Muscat is the capital and largest business centre in Oman.
What is the importance of the liffey river?
Dublin, the capital city of Ireland, is built on it.
Could you Evaluate the importance of capital structure and the cost of capital in efficient financial management of companies?
How do i start answering this question?
When did Babylon regain its importance as the capital city?
It shoud be around 500 B.C
What is the importance of intellectual capital in the corporate world?
One of the key elements that are determining the success of organizations in today's world is the Intellectual Capital of the organization.
