What is capitalization in Finance?

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Question added by Mohammed El Tahir Mohammed Yousif , Finance Manager , Factory of Golden Block Company for Cement Products
Date Posted: 2017/09/06

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by Mohammed El Tahir Mohammed Yousif , Finance Manager , Factory of Golden Block Company for Cement Products

Capitalization comprises of share capital, debentures, loans, free reserves,etc. Capitalization represents permanent investment in companies excluding long-term loans. Capitalization can be distinguished from capital structure. Capital structure is a broad term and it deals with qualitative aspect of finance. While capitalization is a narrow term and it deals with the quantitative aspect.

Capitalization is generally found to be of following types-

Normal

Over

Under

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