Capitalization

Business, Legal & Accounting Glossary

Definition: Capitalization



What is the dictionary definition of Capitalization?

Dictionary Definition


  1. The sale of capital stock.
  2. An estimation of the value of a business.
  3. The act of capitalizing on an opportunity.

n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets.


Full Definition of Capitalization


The market capitalization (market cap) of a company is the stock price multiplied by the number of shares outstanding. Capitalization represents the theoretical price at which one could purchase the entire company. This is only an estimate, however, as a purchase of that size would almost certainly distort the market price. Stocks are divided into classes based on their capitalization. While there is no hard and fast rule, small-capitalization (small-cap) companies have market caps between $0.5-$2 billion. Mid-caps are larger than small-caps, but usually have a capitalization between $2-10 billion. Large-caps have a capitalization of over $10 billion. Many large-caps are also blue-chip stocks. Mega-caps are companies with a capitalization in the hundreds of billions. Capitalization can also refer to the sum of a corporation’s stock, long-term debt and retained earnings. Which sense of the word is being used must be determined from context.


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Capitalization. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. December 01, 2020 https://payrollheaven.com/define/capitalization/.
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Capitalization. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/capitalization/ (accessed: December 01, 2020).
American Psychological Association (APA):
Capitalization. PayrollHeaven.com. Retrieved December 01, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/capitalization/

Definition Sources


Definitions for Capitalization are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 26th April, 2020 | 0 Views.