what is additional paid in capital? In simple terms, additional paid-in capital (APIC) comes from shareholders’ extra investments and increases the strength of the company’s equity. Cash reserve may not generate revenue, but it supports day-to-day activities, helps grow the firm, and protects it during hard times. APIC is an indication that investors are ready to spend more money than the actual stock price. While it is not often used for payments, it reveals the company’s solid finances and plays a role in making business plans and reviewing shareholder equity levels.
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