Capital is an essential part of a company's balance sheet. Business owners and investors strive to increase capital, and the main driver is net income. Each year, net income is reclassified into retained earnings, which form part of the capital. When liabilities increase, their wealth decreases.
On the other hand, when assets increase, their wealth increases. To create an equitable workplace, investing in employees is necessary. This can lead to greater employee retention and engagement. Capital can be increased through deliberate actions such as the dismissal of a company, budgetary restrictions, and a price increase. It can also be the result of net profits that are higher than those budgeted for a company's fiscal year.
Employee salaries and benefits represent a large part of a company's costs, so capital can be increased by reducing, eliminating, or suspending employee-sponsored benefits for a certain period. Taking the time to make a company more equitable could improve its image and generate a more diverse and talented workforce. This increased demand for capital could be beneficial for the company in the long run.
