Capital Investment

AAA

DEFINITION of 'Capital Investment'

Funds invested in a firm or enterprise for the purposes of furthering its business objectives. Capital investment may also refer to a firm's acquisition of capital assets or fixed assets such as manufacturing plants and machinery that is expected to be productive over many years.


Sources of capital investment are manifold, and can include equity investors, banks, financial institutions, venture capital and angel investors. While capital investment is usually earmarked for capital or long-life assets, a portion may also be used for working capital purposes.

INVESTOPEDIA EXPLAINS 'Capital Investment'

Capital investment encompasses a wide variety of funding options. While funding for capital investment is generally in the form of common or preferred equity issuance, it may also be through straight or convertible debt. It may range from an amount of less than $100,000 in seed financing for a start-up to amounts in the hundreds of millions for massive projects in capital-intensive sectors like mining, utilities and infrastructure.

RELATED TERMS
  1. Return On Equity - ROE

    The amount of net income returned as a percentage of shareholders ...
  2. Working Capital

    This ratio indicates whether a company has enough short term ...
  3. Capital

    1) Financial assets or the financial value of assets, such as ...
  4. Capital Investment Analysis

    A budgeting procedure that companies and government agencies ...
  5. Capital Funding

    The money that lenders and equity holders provide to a business. ...
  6. Capital Asset

    A type of asset that is not easily sold in the regular course ...
Related Articles
  1. Working Capital Works
    Insurance

    Working Capital Works

  2. Venturing Into Early-Stage Growth Stocks
    Investing

    Venturing Into Early-Stage Growth Stocks

  3. How To Invest In Private Equity
    Mutual Funds & ETFs

    How To Invest In Private Equity

  4. The Capital Asset Pricing Model: An ...
    Fundamental Analysis

    The Capital Asset Pricing Model: An ...

Hot Definitions
  1. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  2. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  3. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  4. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  5. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  6. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
Trading Center