Capital goods - What are they? characteristics, examples, and more

Capital goods - What are they? characteristics, examples, and more
Posted on 09-03-2022

Capital goods

Set of assets that make production operations effective.

What are capital goods?

Capital goods are the set of assets destined for production operations in an organization, for which they are considered assets of the company that fulfills a long-term operation.

This type of goods includes all the assets that participate directly in the production processes within a company, such as the physical facilities in which a factory is established and the machinery used to carry out operations related to the production of a product. good or service.

Capital goods are also known as investment goods since the organization that owns them invested part of its resources in their acquisition in order to have adequate means and efficiently carries out production activities. Capital goods are considered part of the accumulation of capital destined for the company's production.

The importance of capital goods in an organization lies in the notorious improvement in the efficiency of productive operations. In addition, since the work of these goods consists of facilitating tasks, a company should not do without the use of this set of assets if it wants to increase its production.

Characteristics of capital goods

The main characteristics of capital goods are the following:

  • They are part of the heritage of the organization.
  • They are intended for production processes for the manufacture of consumer goods or provision of services.
  • They are considered machinery.
  • Optimize productive development.
  • They optimize the efficiency of production operations.
  • They have a long shelf life.
  • They are acquired with the purpose of making production processes effective.
  • They require maintenance every certain period of time to guarantee their correct operation and prolong their useful life.

Examples of capital goods

Here are some examples of capital goods:

  • Electric arms.
  • Lift truck.
  • A backhoe.
  • Engines.
  • An oven.
  • A fryer.
  • A truck.
  • Concrete mixer.
  • Sheller.
  • a lathe
  • A sewing machine.
  • The physical facilities of a factory.
  • Seeders.

 

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