The nature of capital and income

Bibliographic data

Monograph

Identifikator:: 102659555X

URN:: urn:nbn:de:zbw-retromon-82920

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The nature of capital and income

Place of publication:: New York

Publisher:: The Macmillan Company

Year of publication:: 1923

Scope:: XXI, 427 Seiten

Digitisation:: 2019

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Capital

Collection:: Economics Books

NATURE OF CAPITAL AND INCOME [Cuar. V § 10 Insolvency may exist for a time without being known; there may be no legal bankruptcy. Legal bankruptcy exists as soon as there is a legal declaration of inabilit y to meet obligations. This may not be true insolvency. For instance, the assets may exceed the liabilities, but the cash assets at the particular time may be less than the cash liabilities due at that time. This condition we may call | pseudo-insolvency. In such a case, a little forbearance on the part of creditors may be all that is necessary to prevent financial shipwreck. A wise merchant, however, will not only avoid insolvency, but also pseudo-insolvency; that is, he will not only keep his assets in excess of his liabilities by a safe margin, but HE will also see that his assets are invested in the right form i so as to enable him to cancel each claim at the time and in the manner agreed upon. From this point of view there are three chief forms of | assets, — cash assets, quick assets, and slow assets. A cash | asset is property in actual money, or what is acceptable in place of money. A quick asset is one which may be ex- changed for cash in a relatively short time, as, for instance, call loans, short-time loans, and other marketable securities. A slow asset is one which can be exchanged for cash only in a relatively long time, as real estate, office fixtures, and many- facturers’ equipment. The skill of a good business man consists in properly marshaling these various constituents of his assets. eT I —_. EE § 11 When we speak of the assets falling short of the liabilities, we refer only to those assets which are included in the balance sheet. There may be, outside of the company, private means of stockholders adequate to meet the debts of a company, but unavailable. In fact, in the case of a joint stock company, there is express provision for “limited

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