The capital employed in a large company, and the manner in which it is raised, belong to the area of the principal, or to the directors. There are aspects of this subject, however, which intimately concern managers. In large measure it is they who determine how the capital is employed, and employed to the best advantage. If a company is over-capitalized, that is, if the issued capital is more than the business can earn in profits to pay reasonable dividends, the fault does not lie with the management.
The working capital of a limited liability company may fall far short of its total issued capital, thereby proving a serious handicap to its dividend-earning powers. Insufficiency of working capital is the rock on which many a business comes to grief. That part of a company capital which represents money paid, or shares issued to vendors, or promoters, or used in providing buildings, plant and equipment may be out of all proportion to what is left in liquid form as working capital. leia todo o artigo
