Recent Examples of capitalization from the Web
Allowing them to list 5% of their overseas tradable capitalization is roughly the total amount raised in new public share offerings on the Shanghai and Shenzhen exchanges last year, Citic said.
On this basis a complete reversal has taken place since 2008, with oil and gas almost halving from 13% to below 7% of global capitalization.
The Islamic State group’s capitalization on its fortunate find after the northern Niger battle highlighted the risk for the U.S. military of its men and women using the popular mini-cameras on missions.
The proof that this is an official Trump tweet comes from the random capitalization.
Morningstar ranks his Endeavor fund first among large capitalization blended mutual funds over 10-, five- and three-year periods.
Among other projections in the 51-page report are: Asia’s stock market capitalization will double to $56 trillion over the next 10 years, overtaking North America, with China and Hong Kong the biggest source of growth.
Notice the lack of capitalization at the beginning of each sentence, something most people learn in their early elementary school years.
Less than one-fifth of the domestic workforce is employed by the Fortune 500 behemoths that make up about two-thirds the total capitalization of the U.S. equity market.
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.
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
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