[경제용어:자본잠식] 자본잠식 쉽게 파악하는 법! 자본잠식이란 무엇일까? // 이투데이_쉬운경제

Summary

This video script explains the concept of capital erosion in financial terms. Capital erosion occurs when a company's total capital is less than its capital contribution, typically due to continuous losses. The script illustrates this with an example of Company A, which initially had a total capital of 100 billion won, but after incurring a loss, its total capital decreased to 75 billion won, indicating capital erosion. The capital erosion rate is calculated as the percentage of the decrease in total capital relative to the capital contribution. The video warns that severe capital erosion can lead to a company being delisted from the stock market, emphasizing the importance of understanding this financial indicator.

Takeaways

• 💼 Capital erosion refers to a situation where the total capital on a company's financial statements is less than the capital contributed by the owners.
• 📈 The total capital includes the invested capital from the business owner and the capital raised through stock issuance, plus any retained earnings from business operations.
• 💸 If a company continues to operate at a loss, it can deplete its retained earnings and even the invested capital, leading to capital erosion.
• 🏢 For example, if Company A had a total capital of 100 billion won from invested capital and retained earnings of 20 billion won, but then suffered a loss of 10 billion won, its total capital would be reduced to 75 billion won, indicating capital erosion.
• 📉 The capital erosion rate can be calculated as the percentage of the difference between the invested capital and the total capital, multiplied by 100.
• 🚨 Capital erosion signals that a company's financial health is in a precarious state.
• 📉 If a company's capital erosion rate reaches 50% or more, it can be designated as a managed stock item.
• ⏳ If the capital erosion rate is maintained at 50% or more for over two years, the company may be delisted from the stock exchange according to regulations.
• 💡 A total capital of zero, or a 100% capital erosion rate, is referred to as complete capital erosion, which can lead to immediate delisting.
• 👍 Understanding capital erosion is crucial for assessing a company's financial stability.

Q & A

What is capital erosion?

Capital erosion refers to a situation where the total capital on the financial statement is less than the capital contributed by the business owner. It can occur when a company incurs losses that deplete not only its retained earnings but also its contributed capital.

What are the components of total capital?

Total capital consists of the contributed capital from the business owner and retained earnings, which is the accumulated profits from business activities.

How does a company's financial performance affect its total capital?

If a company's performance is poor, leading to losses, it can reduce its retained earnings and potentially lead to capital erosion if the losses are significant enough.

What is an example of capital erosion given in the script?

In the example, Company A had a total capital of 100 billion won, consisting of 80 billion won in contributed capital and 20 billion won in retained earnings. However, due to poor performance, they incurred a loss of 10 billion won, reducing the total capital to 75 billion won, indicating capital erosion.

What is the formula to calculate the capital erosion rate?

The capital erosion rate is calculated by dividing the difference between the contributed capital and the total capital by the contributed capital, and then multiplying by 100 to get a percentage.

What is the significance of a capital erosion rate of 12% as mentioned in the script?

A capital erosion rate of 12% indicates that the company's financial health is at risk, as it shows that 12% of the contributed capital has been eroded due to losses.

What happens if a company's capital erosion rate reaches 50% or more?

If a company's capital erosion rate reaches 50% or more, it may be designated as a management concern and could face delisting from the stock exchange if the condition persists for over two years.

What is the term for a situation where the total capital is zero?

A situation where the total capital is zero is referred to as 'complete capital erosion,' and in such a case, the company's stock listing can be immediately revoked.

Why is it important for investors to understand capital erosion?

Understanding capital erosion is crucial for investors as it provides insights into the financial stability and risk associated with a company's operations and investment.

What action is recommended for viewers at the end of the script?

The script encourages viewers to like and subscribe for more content on the topic of capital erosion.