Archives: Terms

Definition of Capital Gearing Capital Gearing, also known as financial leverage or capital structure, refers to the ratio between various types of securities and capital used by a company to finance its overall operations and growth. In essence, it points to the balance between equity (shares owned by shareholders) and […]

Definition of Capital Expenditure Capital expenditure, often abbreviated as CapEx, refers to the funds used by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment. This type of expenditure is made by companies to increase the scope of their operations or add some […]

Definition of Capital Deepening Capital deepening is a concept in economics that refers to an increase in the capital-to-labor ratio within an economy. This increase indicates that each worker is equipped with more capital, meaning more tools, machinery, and technology are available to them. The term “deepening” implies that an […]

Definition of Capital Consumption Capital consumption, also known as depreciation, refers to the gradual decline in the economic value of the physical assets of a company or economy over time. This concept is critical in understanding how assets lose their value and service potential due to factors such as wear […]

Definition of Capital Asset Pricing Model (CAPM) The CAPM is a financial model used to determine the expected return on an investment, given its risk relative to the market. It shows the relationship between systematic risk and expected return for assets, particularly stocks. CAPM is widely used in finance for […]

Definition of Capital Appreciation Capital Appreciation refers to an increase in the value of an asset over time. This can apply to real estate, stocks, mutual funds, or any other asset that has the potential to increase in value. Unlike income generated from interest or dividends, which provides regular earnings, […]

Definition of Capital Allowances Capital allowances are a form of tax relief available to businesses, aimed at encouraging investment by allowing companies to deduct the cost of certain assets from their taxable income. These assets include equipment, machinery, and vehicles used in the business. The purpose is to give a […]

Definition of Capital Adequacy Capital adequacy refers to the amount of capital a bank or financial institution must hold as required by its financial regulator. This capital acts as a cushion for depositors and helps ensure the stability and efficiency of financial systems by limiting the risk of default. Capital […]

Definition of Call Money Call money, also known as “call loans,” refers to short-term finance that banks lend to brokers, who then extend it to investors for buying stocks on the stock exchange. These loans can be called back by the lending bank at any time, with very short notice—usually […]

Definition of Cairns Group The Cairns Group is an interest group of 20 agricultural-exporting countries, united by their common goal of liberalizing global agricultural trade. Founded in 1986 in Cairns, Australia, after which it is named, this coalition aims to reform agricultural trade practices by reducing trade barriers and subsidies […]