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Capital growth |
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Capital growthWhere the original amount you invest increases over a period of time. Generally this is achieved by interest or dividends being added back to an account for reinvestment.Capital growthIn general terms, the increase in value of an asset.As far as shares are concerned, capital growth is an increase in share price compared to what you paid, and is one of the elements of what investors called 'total return', the other component being income through dividends.Research has shown that investing in shares over the last 50 years produced a better total return than investments in bonds or deposits, and capital growth has been a major part of that superior performance. There is certainly no guarantee that shares will continue to outperform other investments, but most observers believe that they will over the long term.Similar MatchesCapitalization tableCapitalization tableA table showing the capitalization of a firm, which typically includes the amount of capital obtained from each source - long-term debt and common equity - and the respective capitalization ratios. Market capitalisationMarket capitalisationThe market value of a quoted company which is calculated by multiplying its current share price by the number of shares in issue.e.g. Company A has 120 million shares in issue. The current market price is 96p. The market capitalisation is a shade over £115 million.The share prices of companies on the Official List of the London Stock Exchange move constantly in response to supply and demand, and as they move, so do market capitalisations. You can see what the market caps of these companies are by looking at the columns of prices in the financial press every day, or on websites.Of course, market caps calculated in this way do not necessarily reflect the actual market value of companies, as is shown when one company launches a takeover bid for another and (as frequently happens) pays a premium over the pre-bid price.Market caps are important for another reason, which is that some of the most important indices (especially the FTSE 100 and FTSE Mid 250) are based on them. Not only that - tracker funds make their investments on the basis of indices. Capital adequacyCapital adequacyA measure of the financial strength of a bank or securities firm, usually expressed as a ratio of its capital to its assets. For banks, there is now a worldwide capital adequacy standard, drawn up by the Basle committee, of the Bank for International Settlements. This BIS ration requires banks to have capital equal to 8 per cent of their assets. Physical capitalPhysical capitalThe same as "capital," without any adjective, in the sense of plant and equipment. The word "physical" is used only for clarity, to distinguish it from human capital and financial capital. Capital appreciationCapital appreciationSee: Capital growth Further SuggestionsCapital gains distributionCrony capitalism Capital adequacy ratio Net working capital Pie model of capital structure Capital appreciation or depreciation Capital Gains Recapitalization proposal Capital surplus Capital intensity Capital turnover Capital movement Capitalism Capital account surplus Capital depreciation Capital mobility Capital Assets Short-term capital flow risk capital Capitalization Weighted Index Capital outflow split capital investment trust Perfect capital market Capital-using Capital account deficit |
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