answersLogoWhite

0

Overcapitalization

A company is said to be overcapitalized, when its total capital (both equity and debt) exceeds the true value of its assets. It is wrong to identify overcapitalization with exess of capital because most of the overcapitalized firms suffer from the problems of liquidity.

Undercapitalization

Under-capitalization is just the reverse of over-capitalization. A company is considered to be under-capitalized when its actual capitalization is lower than its proper capitalization as warranted by its earning capacity.

User Avatar

Wiki User

13y ago

What else can I help you with?

Related Questions

Difference between over capitalization and under capitalisation?

OvercapitalizationA company is said to be overcapitalized, when its total capital (both equity and debt) exceeds the true value of its assets. It is wrong to identify overcapitalization with exess of capital because most of the overcapitalized firms suffer from the problems of liquidity.UndercapitalizationUnder-capitalization is just the reverse of over-capitalization. A company is considered to be under-capitalized when its actual capitalization is lower than its proper capitalization as warranted by its earning capacity.


What are the difference in stem positions when notes are placed on the third over the third or under the third lines of the staff?

the difference between the third and over the third or under the third line is that they are difference


What is the difference between an electrical surge and a brownout?

A surge is an over voltage and over current situation and a brownout is an under voltage situation.


What is the difference between the base words super and sub?

Think of 'super' as over or above and 'sub' as under or below.


What is the difference between under driven and over driven superchargers r?

Over driven blowers are geared to spin higher rpm then the motors actual rpm. Vise versa for Under driven.


What is the difference between an overpass and An underpass?

An overpass goes over another road, but an underpass goes under another road.


What is the difference between a baseball pitch and softball pitch?

Baseball is a over-handed pitch. Softball is a under-handed pitch


How can the type of bond be predicted?

Ionic bond: the difference between electronegativities of the atoms is over 2.Covalent polar bond: the difference between electronegativities of the atoms is under 2.Covalent non-polar bond: the difference between electronegativities of the atoms is cca. zero


What are the difference between adult and infant?

an adult is over 18 old, an infant is under 2 years


What are the difference between lintels and beams?

A lintel is over a window or door and a beam is usually under the structure of the building, either the roof or the floor.


Difference between acidity and alkalinity in fisheries management?

An alkaline solution has the pH over 7. An acidic solution has the pH under 7.


What is the difference between over costing under costing?

Over costing means charging more costs to items than it's actual cost while under costing means charging less cost then actual costs.