EDU Articles

Learn about investing, trading, retirement, banking, personal finance and more.

Ad is loading...
Help CenterFind Your WayBuy/Sell Daily ProductsIntraday ProductsFAQ
Expert's OpinionsWeekly ReportsBest StocksInvestingTradingCryptoArtificial Intelligence
IntroductionMarket AbbreviationsStock Market StatisticsThinking about Your Financial FutureSearch for AdvisorsFinancial CalculatorsFinancial MediaFederal Agencies and Programs
Investment PortfoliosModern Portfolio TheoriesInvestment StrategyPractical Portfolio Management InfoDiversificationRatingsActivities AbroadTrading Markets
Investment Terminology and InstrumentsBasicsInvestment TerminologyTrading 1 on 1BondsMutual FundsExchange Traded Funds (ETF)StocksAnnuities
Technical Analysis and TradingAnalysis BasicsTechnical IndicatorsTrading ModelsPatternsTrading OptionsTrading ForexTrading CommoditiesSpeculative Investments
Cryptocurrencies and BlockchainBlockchainBitcoinEthereumLitecoinRippleTaxes and Regulation
RetirementSocial Security BenefitsLong-Term Care InsuranceGeneral Retirement InfoHealth InsuranceMedicare and MedicaidLife InsuranceWills and Trusts
Retirement Accounts401(k) and 403(b) PlansIndividual Retirement Accounts (IRA)SEP and SIMPLE IRAsKeogh PlansMoney Purchase/Profit Sharing PlansSelf-Employed 401(k)s and 457sPension Plan RulesCash-Balance PlansThrift Savings Plans and 529 Plans and ESA
Personal FinancePersonal BankingPersonal DebtHome RelatedTax FormsSmall BusinessIncomeInvestmentsIRS Rules and PublicationsPersonal LifeMortgage
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

What is Paid-Up Capital?

A company's financial structure must include paid-up capital as a crucial component. It indicates the entire sum of money a business has acquired through the issuance of stock. Paid-up capital funds are crucial for a business's operations since they support business growth efforts like new product development and business expansion.

Understanding the distinction between paid-up and permitted capital is crucial for comprehending paid-up capital. The authorized capital is the most money a business can borrow through the sale of stock. This ceiling is established in the company's articles of organization, and it can only be raised with the approval of the shareholders.

On the other hand, paid-up capital is the portion of authorized capital that a company has already issued and received payment for. For example, if a company has authorized capital of $1 million and has issued and received payment for $500,000 worth of shares, the paid-up capital of the company would be $500,000.

The amount of paid-up capital a company has is critical in determining its financial strength and stability. It's an essential metric that investors look at when evaluating a company's potential for growth and profitability. Additionally, paid-up capital plays a crucial role in determining a company's ability to secure additional financing, as lenders and creditors typically require a minimum level of paid-up capital before extending credit.

Paid-up capital is not to be confused with retained earnings, which are profits that a company has earned but has not yet distributed to shareholders. Retained earnings are an essential source of funding for companies, as they can be used to finance future growth and investment initiatives. However, they are distinct from paid-up capital, which is money that has been invested in the company through the purchase of shares.

When a company issues shares of stock, it typically sets a par value for each share. The par value is the minimum price at which a share can be issued. For example, a company may set a par value of $1 per share. When investors purchase shares, they pay the offer price, which is typically higher than the par value. The difference between the offer price and the par value is the paid-in capital.

For instance, if a company issues 10,000 shares of stock with a par value of $1 per share and an offer price of $5 per share, the paid-in capital would be $40,000 ($5 offer price - $1 par value x 10,000 shares). In this example, the authorized capital would remain at $10,000, and the paid-up capital would be $40,000.

It's worth noting that paid-up capital only includes funds raised through the sale of shares to investors. It does not include any additional capital that the company may have raised through other means, such as loans or bonds. Additionally, any shares that are bought and sold on the secondary market do not increase paid-up capital, as those transactions occur between shareholders and do not flow back to the company in the form of new capital.

Paid-up capital is a critical metric for evaluating a company's financial strength and stability. It represents the total amount of money that a company has raised through the sale of shares of stock. This money is invested in the company by shareholders and is not borrowed. The amount of paid-up capital a company has is essential in determining its ability to secure additional financing, and it's a crucial factor that investors consider when evaluating a company's potential for growth and profitability. Understanding paid-up capital is essential for anyone interested in investing in the stock market or evaluating the financial health of a company.

Tickeron's Offerings

The fundamental premise of technical analysis lies in identifying recurring price patterns and trends, which can then be used to forecast the course of upcoming market trends. Our journey commenced with the development of AI-based Engines, such as the Pattern Search Engine, Real-Time Patterns, and the Trend Prediction Engine, which empower us to conduct a comprehensive analysis of market trends. We have delved into nearly all established methodologies, including price patterns, trend indicators, oscillators, and many more, by leveraging neural networks and deep historical backtests. As a consequence, we've been able to accumulate a suite of trading algorithms that collaboratively allow our AI Robots to effectively pinpoint pivotal moments of shifts in market trends.

Ad is loading...