Meaning of Capitalization

Meaning of Capitalization

Capitalization is called the act and the consequence of capitalizing: taking advantage of something for your own benefit. In the specific context of the economy, capitalizing means transforming something into capital or contributing capital to a company.

To understand what capitalization is, therefore, we must first know that, in the economic field, the asset or good whose function is to generate wealth is called capital. Capitalization, in short, aims to provide capital or to convert something into capital.

The market capitalization, also known as market capitalization, is the value of all the shares of a company, a market or industry. Said value is estimated from the listing on the stock market.

It can be said that the market capitalization represents the equity of the company that is available for sale and active purchase through the stock market. This capitalization equals the price per share at a certain point in time, multiplied by the number of shares that are outstanding. If there are 10,000 shares of a company outstanding and each share is worth $ 50, the market capitalization of the company in question is $ 500,000.

The mere capitalization is the procedure followed when changes in capital are not cumulative. This means that the interest generated in each period is not added to the capital when calculating the new interest for the following period: that is why the interest is proportional to the capital available and to the period.

The compounding, however, is the periodic interest accumulation of capital, generating more interest your time.

In the same way, it must be clear that in Spain there is also what is known as capitalization of unemployment or capitalizing unemployment. Basically we can establish that it is a measure implemented with the clear purpose of encouraging unemployed citizens to become self-employed professionals and can begin to undertake, to self-employ.

The measure in which it consists is to allow a person who can advance his pending unemployment payment as long as he is going to allocate it as an advance to an entrepreneurial activity.

The people who can access this capitalization are those who are going to join a cooperative as working partners, who are going to register as self-employed and who are going to use the amount of the benefit to be able to contribute social capital to what is an entity of merchant type. This entity that, yes, must have been created at least twelve months before the moment in which the money is contributed.

In the field of cryptocurrencies, capitalization has also taken on a special role. Thus, in the market, in order to be able to know their status, it is common for both their market capitalization and their diluted capitalization to be analyzed. This last term refers to the value that each cryptocurrency is expected to have based on both its present and the possible appearance of other new cryptocurrencies that are not yet in circulation.