The report also said Reliance Jio raised Rs.1.52 crore by selling 33 percent shares. This way they managed to cut down their net debt target for the whole year. So, what are shares in accounting?
A share represents the unit of ownership in a company that can be bought and sold. When a company needs funds to boost its growth, they offer company shares to investors. The investors who buy these shares are called company shareholders. By buying these shares, they get part ownership in the company.
The above-mentioned news is a great example of shares and their use. Reliance Jio required funds for the development of entry-level smartphones. Hence, they sold a few company shares to raise the required amount.
This way, focusing on their growth and development, companies can issue different types of shares. Companies mostly issue equity and preference shares. This article will discuss more about the different kinds of shares in detail.