What Are Additional Paid-In Capital?

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Additional paid-in capital (APIC) represents the amount contributed by the investors in a firm over and apart form the par value of the stock. It is valued under the equity part of the balance sheet and demonstrates the amount of additional investment, which shareholders provided in comparison with the nominal share price. APIC does not comprise operation revenues or profits. It is a significant source of funds in businesses particularly when they are issuing a public offering. A high APIC can be considered as a sign of confidence in the investors. Nevertheless, it cannot be used in paying dividends, unless the company produces retained earnings through real business activities.

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