What does a statement of capital show?

A statement of capital provides a clear summary of how ownership values have changed over a specific period. This document reflects movements in shareholders' equity, including investments, withdrawals, and the effects of profits or losses on the owners’ equity. Changes in ownership value highlight how the company's performance affects the stakeholders' investment value, which is fundamental for assessing overall financial health and planning for future investments.

In contrast, other options, while related to finance and capital, do not accurately represent the specific function of a statement of capital. For instance, assets allocated to capital investments pertain more to a balance sheet perspective, focusing on the allocation and management of resources rather than ownership changes. Projected capital gains and losses deal with future expectations rather than historical changes over time. Distribution of profits among partners is more pertinent to partnership agreements and income statements, rather than tracking the equity fluctuations within the capital accounts. Thus, the core function of the statement of capital is best reflected in the changes in ownership value it displays.