Capitalization

What Does Capitalization Mean?
1. In accounting, it is where costs to acquire an asset are included in the price of the asset.

2. The sum of a corporation's stock, long-term debt and retained earnings. Also known as "invested capital".

3. A company's outstanding shares multiplied by its share price, better known as "market capitalization".

Investopedia explains Capitalization
1. For example, if a machine has a price of $1 million this value would be recorded in the assets, if there was also a $20,000 charge for shipping the machine then this cost would be capitalized and included in assets.

2. The capitalization of a firm can be overcapitalized and undercapitalized, both of which are potential negatives.

3. If a company has 1,000,000 shares and is currently trading at $10 a share, their market capitalization is $10,000,000.