How Do You Spell ACTIVE CAPITAL?

Pronunciation: [ˈaktɪv kˈapɪtə͡l] (IPA)

The spelling of the word "active capital" can be explained through its phonetic transcription in IPA: /ˈæktɪv ˈkæpɪtəl/. The first syllable is pronounced as "act" with a short "a" sound, followed by "iv" with a long "i" sound. The second word starts with a hard "k" sound, followed by a short "a" sound, then "pi" with a long "i" sound, and "tal" with a short "a" sound. This term is commonly used in finance to refer to capital used for a company's normal operations as opposed to long-term investments.

ACTIVE CAPITAL Meaning and Definition

1. Active capital refers to the funds that a company actively utilizes for its day-to-day operations and activities. It represents the financial resources that are readily available to a business for immediate use and investment. Active capital is also known as operating capital or working capital and plays a crucial role in sustaining the ongoing operations of an enterprise.

   Active capital primarily consists of a company's cash on hand or in bank accounts, as well as its liquid assets such as inventory, accounts receivable, and short-term investments. These resources are essential for covering operational expenses, paying suppliers, and maintaining the business's daily functioning.

   Having sufficient active capital is fundamental for a company's smooth operations and strategic growth. It enables businesses to seize opportunities, manage short-term financial obligations, and meet unforeseen expenses. Insufficient active capital can lead to operational inefficiencies, missed business prospects, difficulty in paying bills, and can even affect the company's creditworthiness.

   A company's ability to effectively manage its active capital is crucial for maintaining liquidity and ensuring the long-term viability of the business. This involves accurately forecasting and managing cash flow, maintaining a healthy balance between cash inflows and outflows, minimizing excess inventory and accounts receivable, and optimizing short-term investments.

   In summary, active capital encompasses the financial resources readily available for a company's everyday operations, consisting of cash, liquid assets, and short-term investments. It facilitates ongoing business activities, helps meet financial obligations, and supports a company's growth and stability.

Common Misspellings for ACTIVE CAPITAL

• zctive capital
• sctive capital
• wctive capital
• qctive capital
• axtive capital
• avtive capital
• aftive capital
• adtive capital
• acrive capital
• acfive capital
• acgive capital
• acyive capital
• ac6ive capital
• ac5ive capital
• actuve capital
• actjve capital
• actkve capital
• actove capital
• act9ve capital
• act8ve capital

Etymology of ACTIVE CAPITAL

The term "active capital" does not have a specific etymology because it is a combination of two separate words: "active" and "capital".

- The word "active" comes from the Latin word "activus", which means "doing" or "performing". It entered the English language in the late 14th century, derived from Old French "actif" or directly from Latin.

- The word "capital" comes from the Latin word "capitalis", meaning "of the head" or "related to the head". It was initially used to refer to a person's life or head in the sense of punishment by execution. Over time, it came to represent the top or main part and eventually acquired the financial sense as a reference to wealth or investment.

When combined, "active capital" represents the concept of financial resources or assets that are actively employed or used to generate income or profit.

Plural form of ACTIVE CAPITAL is ACTIVE CAPITALS