The assets that a company has can be divided into two broad categories which are financial and physical capital. Physical capital refers to the tangible assets that the company possesses such as equipment, inventory, factories, etc which are used for the production of goods and services by the company. Financial capital refers to the legal ownership of all the physical capital and the monetary value of all the assets that can be liquidated for cash. Examples of financial capital include: shares of stocks, cash in hand, landed properties, etc.
The distinction between physical and financial capital is that