Capitalization 
 • The debt and/or equity mix that fund a firm's assets. 
 • Also known as Invested Capital or Capital Structure. The sum of a corporation's stock, longterm debt, and retained earnings. 

 Follow this link for all the terms related to capital. 

 Embedded terms in definition 
 Assets Capital structure Capital Debt Earnings Equity Invested capital Retained earnings Stock


 Referenced Terms 
 Capital structure: The mix of longterm debt and equity maintained by the firm.The makeup of the liabilities and stockholders' equity side of the balance sheet, especially the ratio of debt to equity and the mixture of short and long maturities.See Capitalization.

 Capitalization method: A method of constructing a replicating portfolio in which the manager purchases a number of the largestcapitalized names in the index stock in proportion to their Capitalization.

 Capitalization ratios: Show how a firm has financed the investment in assets. There are three Capitalization alternatives: debt, preferred equity and common equity.Also called financial leverage ratios, these ratios compare debt to total Capitalization and thus reflect the extent to which a corporation is trading on its equity. Capitalization ratios can be interpreted only in the context of the stability of industry and company earnings and cash flow.

 Capitalization ratios: Show how a firm has financed the investment in assets. There are three Capitalization alternatives: debt, preferred equity and common equity.Also called financial leverage ratios, these ratios compare debt to total Capitalization and thus reflect the extent to which a corporation is trading on its equity. Capitalization ratios can be interpreted only in the context of the stability of industry and company earnings and cash flow.

 Capitalization table: A table showing the Capitalization of a firm, which typically includes the amount of capital obtained from each source longterm debt and common equity and the respective capitalization ratios.


 Related Terms 
 Capitalization method Capitalization rate Capitalization ratios Capitalization table Long term debt to capitalization Market cap or market capitalization Market capitalization Market capitalization rate
