Capital formation is the net increase in capital for a country over an accounting period. The phrase describes the addition of capital items including machinery, tools, vehicles, and electricity.
A factory and its equipment, intellectual property like patents, or a person's or a company's financial assets are all examples of things that offer their owner value or an advantage and fall within the wide definition of capital.
Despite the fact that money itself can be referred to as capital, the term is typically used to refer to cash used to buy items or make investments.
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