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Paid-in capital, which is also referred to as contributed capital, "Is the total amount paid in on capital stock." This is money received from investors to purchase stock in the company.
Earned capital is not monies received from outside investors. It is, "the capital that develops if the business operates profitably; it consists of all undistributed income that remains invested in the enterprise". In other words it is my understanding that this is the money that is re-invested in the company or corporation to continue growing and operating.
As an investor, is paid-in or earned capital more important? Why?
From my understanding earned capital is more important to an investor...
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