When capital will be introduce then surely it will result in increase in assets and the ownership interest .

Introduction of Fresh Capital

Introduction of fresh capital refers to the process of adding new funds to a company's balance sheet. It can be done through various means such as the sale of shares, issuance of bonds, or taking on a loan. Fresh capital introduction is an important aspect of a company's growth strategy as it provides the necessary funds to invest in new projects, expand operations and improve profitability.

Impact on Assets and Equity

When a company introduces fresh capital, it has a direct impact on its balance sheet. The balance sheet is made up of assets, liabilities, and equity. The impact of fresh capital on the balance sheet is as follows:

- Assets: Fresh capital introduction increases the assets of the company. This is because the company now has more funds to invest in new projects, acquire new assets, or improve existing ones.
- Equity: Fresh capital introduction increases the equity of the company. This is because the new funds are added to the company's retained earnings, which are part of the equity section of the balance sheet.

Impact on Liabilities and Bank Balance

Fresh capital introduction does not have a direct impact on the liabilities and bank balance of the company. However, if the new funds are used to pay off existing liabilities or reduce the company's debt, then there will be a decrease in liabilities. Similarly, if the new funds are deposited in the company's bank account, then there will be an increase in the bank balance.

Conclusion

In conclusion, the introduction of fresh capital increases the assets and equity of the company. This provides the necessary funds to invest in new projects, expand operations and improve profitability. While it does not have a direct impact on liabilities and bank balance, it can indirectly lead to a decrease in liabilities and an increase in the bank balance if the funds are used in the right way.