What does overcapitalisation mean?

Definitions for overcapitalisation
over·cap·i·tal·i·sa·tion

This dictionary definitions page includes all the possible meanings, example usage and translations of the word overcapitalisation.

Princeton's WordNet

  1. overcapitalization, overcapitalisationnoun

    (business) too much capitalization (the sale of more stock than the business warrants)

ChatGPT

  1. overcapitalisation

    Overcapitalisation is a financial condition where a company has more capital (money or assets) than it needs or can profitably use. This typically occurs if the company's earnings are not sufficient to yield a fair return on the amount of capital invested. Factors leading to overcapitalisation may include borrowing too much money, over-inflating the company’s asset value, or earning poor profits. Overcapitalised companies may struggle to achieve satisfactory returns in relation to the capital invested, potentially leading to financial inefficiency and a loss of shareholder value.

Wikidata

  1. Overcapitalisation

    Overcapitalisation refers to an economic phenomenon whereby the valuation/ price of an asset is superior to its ‘real’ value – however difficult to define - therefore putting a strain on attempts to obtain a reasonable return on investment. This is especially the case when capital goods are at stake which are necessary to engage in the production of goods or delivery of services. It is less the case with those contemporary financial instruments that are valued not for their returns, but for their potential earnings upon resale. Overcapitalisation is closely related to assets inflation. As the financialisation of the economy has led to the monetisation of many non-financial assets, such as real estate, infrastructures, etc., overcapitalisation has become rife, with deleterious consequences at the level of firms, households, and individuals.

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Numerology

  1. Chaldean Numerology

    The numerical value of overcapitalisation in Chaldean Numerology is: 9

  2. Pythagorean Numerology

    The numerical value of overcapitalisation in Pythagorean Numerology is: 2

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"overcapitalisation." Definitions.net. STANDS4 LLC, 2024. Web. 19 Apr. 2024. <https://www.definitions.net/definition/overcapitalisation>.

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