capitalize
verb
, ˈkap-tə-\
Definition of capitalize
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Synonyms & Antonyms for capitalize
Synonyms
bankroll, endow, finance, fund, stake, subsidize, underwrite
Antonyms
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Examples of capitalize in a Sentence
Recent Examples on the Web
For the past several years, many Super Bowl advertisers have released their commercials online days or even weeks in advance, hoping to capitalize on the extra exposure and attention. — Suzanne Vranica, WSJ, "Shhh! The Surprise Super Bowl Ad Is Back in Vogue," 1 Feb. 2019 In 2017, the model received backlash for starring in a tone-deaf Pepsi commercial that capitalized on protest movements to sell soda. — Nicole Saunders, Harper's BAZAAR, "Kendall Jenner Announced She is the New Face of Proactiv, and The Internet Is Unamused," 7 Jan. 2019 To many, the costume was a gross way to capitalize on what has become a symbol of women's rights and protest. — Julyssa Lopez, Glamour, "Praise Be: This Sexy Handmaid's Tale Costume Got Pulled After Backlash," 21 Sep. 2018 In the eastern province city of Al Khobar, Seham al-Amri, 39, is one of a significant number of Saudi women who have capitalized on the changes to make a better life. — Margaret Coker, New York Times, "Saudi Women Can Drive, but Here’s the Real Roadblock," 22 June 2018 While the click-to-shop tag has long been available within Instagram’s feed, the transition to Stories is a way for big brands to capitalize on the many viewers on their Stories each day. — Carson Kessler, Fortune, "Instagram Stories Get Shopping Tag Links for In-App Purchases," 13 June 2018 In a statement, CEO Greg Garland said the expansion will better position the facility to capitalize on booming production in the Permian Basin in West Texas. — Katherine Blunt, Houston Chronicle, "Phillips 66 to launch $1.5 billion expansion of Sweeny hub," 13 June 2018 Hard-liners opposed the nuclear deal from the start, saying the US could not be trusted, and have, ever since Trump’s decision, tried to capitalize on their I-told-you-so moment. — Scott Peterson, The Christian Science Monitor, "Iran protests: why Rouhani's foes are backing off their hard line," 2 July 2018 Instincts provide vital information related to both capitalizing on strengths and shoring up any areas that are lacking. — Elisabeth Akinwale, SELF, "Here's What Competing in the CrossFit Games Teaches You About Real Life," 18 May 2018These example sentences are selected automatically from various online news sources to reflect current usage of the word 'capitalize.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for capitalize
capitalize
verbFinancial Definition of capitalize
What It Is
Capitalizing refers to the accounting practice of characterizing the costs of an asset purchase as a long-term asset on the balance sheet instead of an expense on the income statement.
How It Works
Companies capitalize the cost of asset purchases in order to spread out the cost of the assets over many reporting periods. This way, net income is not affected disproportionately in the reporting period in which the asset was purchased.
Rather than being listed as one large expense in one reporting period, a capitalized asset cost will be expensed via depreciation over many reporting periods. On the balance sheet, it will appear as a long-term asset and cash debit. The income statement will also account for a portion of the asset's cost via depreciation expenses.
To illustrate, suppose Company XYZ purchases equipment for $10,000. Rather than report the full $10,000 cost in that period, the company characterizes the purchase as a $10,000 long-term asset. On the balance sheet, the long-term asset account increases and the cash account decreases by $10,000.
As the long-term asset depreciates, the depreciation expense is reported on the income statement. As a result, Company XYZ's bottom line is not grossly affected by the substantial asset purchase in that period. The remainder of the $10,000 will, however, need to be continually reported as a depreciation expense until the asset has fully depreciated.
Why It Matters
Management's decision as to whether to capitalize or expense a purchase has a direct impact on its bottom line. If a company were to report the total cost of an asset purchase as an expense on its income statement (which is to say not capitalize), the cost, depending on the size, it would significantly reduce their net income figure for the reporting period.
Because earnings are probably the single most important indicator of a company's financial strength and growth potential, they are used by investment analysts to provide estimates of a company's growth potential and offer target price estimates for investors interested in purchasing shares. Therefore, company management has a huge interest in managing the way earnings are reported.
Source: Investing Answers
capitalize
verb
English Language Learners Definition of capitalize
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capitalize
verb
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Kids Definition of capitalize
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capitalize
transitive verb
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Legal Definition of capitalize
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