Final answer:
Capital is the lifeblood of a company, crucial for starting, sustaining, and expanding business operations. Profits are the primary measure of a business's success and necessary for its ongoing existence. Initial funding often comes from the business owner, loans, or angel investors.
Step-by-step explanation:
The lifeblood of a company refers to the essential factors that sustain its operations and growth. Capital, whether from the business owner, angel investors, or through financial events like an Initial Public Offering (IPO), is fundamental for a business's survival and is the very reason why businesses exist. A business commences with the aim to generate profits and expands its operations through the injection of financial resources.
Profits act as a measurement of success and determine whether a business will continue to operate or exit an industry. For many startups and small businesses, the original capital is sourced from personal savings, loans, or angel investors who provide funding for a stake in the business. This capital is essential for covering startup costs, and the eventual aim is to return a profit to these initial investments.
Businesses are defined as organizations that operate with the intent to make a profit, regularly interacting with laws, regulations, and ethical codes, which influence their activities. Financial stability, enabled by adequate capital, lays the foundation for ethical business practices and the ability to pursue broader social and environmental goals.