Recent Examples of capitalization from the Web
On the financial front, the company lowered its debt-to-capitalization ratio from 59 percent to 51 percent during 2017.
But for the managers of three of the top-performing mutual funds of the fourth quarter, investing in the market’s mice — small-capitalization stocks — gave enormous gains.
Crude’s surge occurred as U.S. stocks rose to fresh records amid gains in small-capitalization shares and the technology sector.
As of Tuesday, Fitch had a negative outlook on Indian banks based on its assessment of the sector’s weak core capitalization.
While many large capitalization mutual funds have struggled to keep pace with the surging Standard & Poor’s 500-stock index, which returned 14.2 percent, annualized, through September, Dodge & Cox Stock was up 15.6 percent, according to Morningstar.
With this inflated capitalization, Amazon has raised money at below-market interest rates and used that to increase its market share.
Who should get to see the infamous capitalization table?
Her answers have been lightly edited for clarity, but all emphasis and capitalization is her own.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'capitalization.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
First Known Use of capitalization
Financial Definition of CAPITALIZATION
What It Is
In the business world, capitalization has two meanings. The first meaning, also called market capitalization, refers to the value of a company's outstanding shares. The formula for market capitalization is:
It is important to note that market cap is not the same as equity value, nor is it equal to a company's debt plus its shareholders' equity (although that too is sometimes referred to as simply the company's capitalization).
The second meaning of the term relates to the act of accounting for a cost as an asset instead of an expense.
How It Works
Let's assume Company XYZ has 10 million shares outstanding and the current share price is $9. Based on this information and the formula above, we can calculate that Company XYZ's market capitalization is 10 million x $9 = $90 million.
In the second use of the term, let’s assume Company XYZ creates a new drainage system to prevent run-off rainwater from flooding the neighbor’s business. Because the costs associated with the change constitute an addition to the property and allows it to use the property as a concert venue, Company XYZ can capitalize those costs. So, instead of recording the costs as an expense on the balance sheet, which would lower the company’s net income, Company XYZ records the costs as an asset on the balance sheet. These assets then depreciate, which has a much smaller effect on net profits.
Why It Matters
Capitalization reflects the theoretical value of a company, but this is usually not what the company could be purchased for in a normal merger transaction. One reason for this is that the value of material nonpublic information, management changes, operating synergies between the acquirer and the company, and other intangible factors may not be reflected in the stock price or the financial statements.
In the accounting sense, capitalization is good for companies that want to keep net income as high as possible; however, it’s not as good for companies that want to pay as little in taxes as possible (business expenses are tax-deductible; capitalized assets are not).
legal Definition of capitalization
- capitalization of earnings
- inadequate capitalization
Learn More about capitalization
Spanish Central: Translation of capitalization Nglish: Translation of capitalization for Spanish speakers
Seen and Heard
What made you want to look up capitalization? Please tell us where you read or heard it (including the quote, if possible).