Share capital is the money a company has brought in from owners through share issues, shown as part of equity. It is often recorded using nominal or par amounts, with any extra paid sitting in share premium accounts depending on local accounting rules. It is not the same as the current market value of those shares.
Key takeaways
- Share capital comes from issuing shares, not from day-to-day sales.
- Market capitalisation can far exceed book share capital.
- New issues increase share capital and can dilute existing owners.
- Read the equity section of the balance sheet alongside the share count.