Define: Undercapitalisation

UK Accounting Glossary

Definition: Undercapitalisation


Quick Summary of Undercapitalisation


Under-capitalisation refers to any situation where a business cannot acquire the funds they need.



What is the dictionary definition of Undercapitalisation?

Dictionary Definition


The state of a company that doesn’t have sufficient capital or reserves appropriate for the size of it’s operations.

For example: this may be due to the company growing too quickly.

Although such a company may be generating profits it may also be unable to convert these profits, both sufficiently and swiftly into cash in order to pay it’s debts.


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Full Definition of Undercapitalisation



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Examples of Undercapitalisation in a sentence


Undercapitalisation remains the primary reason for business failure within the U.S. today; this is closely followed by insufficient business knowledge and market awareness.



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https://payrollheaven.com/define/undercapitalisation/
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Undercapitalisation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. September 17, 2019 https://payrollheaven.com/define/undercapitalisation/.
Chicago Manual of Style (CMS):
Undercapitalisation. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/undercapitalisation/ (accessed: September 17, 2019).
American Psychological Association (APA):
Undercapitalisation. PayrollHeaven.com. Retrieved September 17, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/undercapitalisation/

Definition Sources


Definitions for Undercapitalisation are sourced/syndicated from:


This glossary post was last updated: 5th May 2019.