Archive | Capitalisation

Over-Capitalisation: Meaning, Effects and Remedies

After reading this article you will learn about Over-Capitalisation:- 1. Meaning of Over-Capitalisation 2. Causes of Over-Capitalisation 3. Effects 4. Remedies. Meaning of Over-Capitalisation: Over-capitalisation refers to that state of affairs where earnings of a company do not justify the amount of capital invested in its business. According to Gerstenberg, “A company is over-capitalised when […]

Under-Capitalisation: Causes, Effects and Remedies

After reading this article you will learn about the Under-Capitalisation:- 1. Meaning of Under-Capitalisation 2. Causes of Under-Capitalisation 3. Effects 4. Remedies. Meaning of Under-Capitalisation: In the words of Gersrtenberg, “A company may be under-capitalised when the rate of profits it is making on the total capital is exceptionally high in relation to the return […]

Capitalisation: Meaning, Need and Theories

After reading this article you will learn about Capitalisation:- 1. Meaning of Capitalisation 2. Modern Concept of Capitalisation 3. Need 4. Theories 5. Fair. Contents: Meaning of Capitalisation Modern Concept of Capitalisation Need of Capitalisation Theories of Capitalisation Fair Capitalisation 1. Meaning of Capitalisation: Capitalisation is one of the most important constituents of financial plan. […]

Over-Capitalisation and Under-Capitalisation (Differences)

This article will help you to differentiate between Over-Capitalisation and Under-Capitalisation. 1. Over-capitalisation involves a great-strain on the financial resources of a company whereas under-capitalisation implies high rate of earnings on its shares. 2. The remedial procedure of over-capitalisation is more difficult and expensive as compared to the remedial procedure of under-capitalisation. 3. Under-capitalisation accelerates […]

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