Listen to a Business English Dialogue About Capital surplus
Stella: Hey Olivia, do you know what capital surplus is?
Olivia: Hi Stella, yes, it’s the amount by which a company’s total capital exceeds its par value.
Stella: Right, it represents the excess of funds raised from issuing stock over the par value of that stock.
Olivia: Capital surplus can arise from issuing stock at a premium or receiving additional paid-in capital.
Stella: Exactly, it’s an important component of a company’s equity and can be used for various purposes such as investments or debt repayment.
Olivia: Yes, companies often utilize capital surplus to finance growth initiatives or distribute dividends to shareholders.
Stella: And since it’s considered part of shareholders’ equity, it contributes to the overall financial health of the company.
Olivia: Definitely, it’s essential for investors and analysts to understand a company’s capital surplus when evaluating its financial position.
Stella: Absolutely, it provides valuable insights into the company’s ability to generate and utilize capital effectively.