what does it mean when total capital investment is $59,000 and liquid capital is $22,000???

Answer 1

Capital investment is comprised of the funds and other assets contributed by the owners and includes cash as well as things the company has purchased, like furniture, fixtures and equipment.

Liquid capital is cash or near-cash items (things can be readily converted to cash), including bank accounts, some stocks and bonds, accounts receivables, etc. Liquid capital represents funds that can be used to pay current debt and manage the other day-to-day expenses of the company, like payroll.

So, the owners have invested total capital of $59,000 to the company but only $22,000 is available for day-to-day operations and expenses.

Answer 2

What Does Capital Investment Mean

Answer 3

The total investment is $59,000.

22,000 lies in the investment account, but uninvested. This is the hedge against a downturn. Most investors feel that some cash must remain uninvested as a hedge.

The more conservative an investor / fund is, the higher percentage the cash. The 35% percent you outline is VERY conservative. 10% cash would be termed equally aggressive.

Good luck in your investments!

Answer 4

It means your total investment is $59,000, but only $22,000 is accessable CASH.

Answer 5

Liquidity refers to how a thing can be sold on the market (and how quickly) without the marketing fluctuations affecting its value. So, in english, how quickly you can convert something to cash. When put like that, think of the liquid as cash you can get pretty fast, while another portion of the investment monies may come from bonds, stock, etc. (things you might have to sell to get the extra money, and their prices may change depending on market). Get it? :)

Answer 6

Ha Ha! Funny! 10!