Capitalization / Capital structure / Financial structure
Encyclopedia of Business Terms and Methods, ISBN 978-1-929500-10-9. Copyright © 2012 by Marty J.Schmidt. Revised 29 January 2012
The Meaning of Capital Structure and Capitalization in Business and Finance
Capitalization is usually synonymous with capital structure. Capitalization is a measure of a company’s financial framework, covering the company’s underlying value as represented by the total securities issued, such as bonds, debentures, long-term liabilities or debt, and preferred and common stock.
A broader measure of this framework is a company’s financial structure, which includes all of the above but also short term liabilities such as accounts payable.
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