Total capital is the total amount of money invested by a company or individual in an investment, and it is an important indicator of the scale of investment by a person or a company. The size of the total capital not only directly affects the return on investment, but also is an important indicator for assessing investment risk. So how to calculate the total capital? Here's how:
Steps to calculate the total amount of capital:
1.Calculate the total amount of cash invested: All invested refers to the total amount of cash used in the investment, such as own funds, loans, financing, etc. These amounts need to be added up to the total amount of cash to be invested.
For example, if an enterprise invests in a new science and technology project and uses its own funds and financing funds, of which its own funds are 5 million yuan and the financing funds are 3 million yuan, the total cash invested is 8 million yuan.
2.List all expenditures: Itemize and categorize all the expenses of this investment in addition to the entire amount of cash invested. For example, equipment purchased, relocation and renovation costs, workers' wages and other operating expenses, etc. Sum up the expense breakdown to get the total amount of the total expenditure.
For example, in the investment project mentioned above, the relevant expenditure details include equipment purchase costs of 2 million, relocation and decoration costs of 500,000 yuan, workers' wages and operating expenses of 1 million, and the total expenditure amount is 3.5 million yuan.
3.Calculate total capital: Total capital is equal to all cash invested minus all expenses. Based on the above data, the calculation formula is as follows: Total Capital = All Cash Invested - Total Expenditure Amount.
For example, in the example investment project mentioned above, the total capital is as follows: 8 million - 3.5 million = 4.5 million RMB.
From the above calculation, we can get the total capital of the investment. It should be noted that this is only one of the comprehensive evaluations of investment, and many other factors need to be considered, such as market prospects, industry competitiveness, national policies, etc., which have an important impact on investment decisions.
Capital