Unrealized capital gains affect a company's financials by being part of economic income and influencing net worth.

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Unrealized capital gains are paper increases in the value of assets that haven’t been sold yet. They don’t generate cash until the asset is actually realized, but they do affect how the company’s performance looks on the financial statements. These gains reflect changes in asset values and thus contribute to economic income—the overall change in the company’s wealth from its investments. As asset values rise, the company’s equity (net worth) increases because the asset side of the balance sheet is higher, even though cash hasn’t moved. Depending on the accounting framework, these unrealized gains may flow through other comprehensive income rather than net income, but the effect on net worth remains. Therefore, unrealized capital gains are part of economic income and affect net worth, rather than being purely cash or only notes.