The most basic answer to this question would be to say that it is the total value of the 'security' in mention. This is a commonly used business term most often used within accounting.
A security refers to a negotiable and tradable asset, which represents an instrument of financial value. These often come in the form of equity securities which are common stocks (separate from preferred stocks) which provide value in the form of dividends and shares. There are two other categories of securities which are: Debt securities (bonds and banknotes) and derivative contracts i.e. Forms of negotiation between companies for takeovers and mergers.
These two terms are not to be confused as they each have two very different definitions. Capital is used to describe the entire assets that a business may hold, whether found financially, or in the land, labor or innovation. Capitalization is only used within businesses that are not sole traders or partnerships and refers to the total value of a product or service.
There are four main definitions of capitalization yet only one seems to logically connect with business securities.
The first occurs within the accounting sector and is the method of recording costs as gradual depreciations rather than one large expense.
The second can be used in corporate areas in order to convert a firm's retained earnings into capital by purchasing stock.
The third definition is a complicated leasing process involving conversions and extent of capital.
The final definition is, once again, used in accounting and is basically referring to the total value of a product or service. This relates to securities as the actual value of the security must be added to the cost of actually acquiring it. For example, if a security costs £1,000 yet another £500 must be invested to acquire it, capitalization would determine that the total value is £1,500.
- Securities
A security refers to a negotiable and tradable asset, which represents an instrument of financial value. These often come in the form of equity securities which are common stocks (separate from preferred stocks) which provide value in the form of dividends and shares. There are two other categories of securities which are: Debt securities (bonds and banknotes) and derivative contracts i.e. Forms of negotiation between companies for takeovers and mergers.
- Capital and Capitalization
These two terms are not to be confused as they each have two very different definitions. Capital is used to describe the entire assets that a business may hold, whether found financially, or in the land, labor or innovation. Capitalization is only used within businesses that are not sole traders or partnerships and refers to the total value of a product or service.
- Capitalization
There are four main definitions of capitalization yet only one seems to logically connect with business securities.
The first occurs within the accounting sector and is the method of recording costs as gradual depreciations rather than one large expense.
The second can be used in corporate areas in order to convert a firm's retained earnings into capital by purchasing stock.
The third definition is a complicated leasing process involving conversions and extent of capital.
The final definition is, once again, used in accounting and is basically referring to the total value of a product or service. This relates to securities as the actual value of the security must be added to the cost of actually acquiring it. For example, if a security costs £1,000 yet another £500 must be invested to acquire it, capitalization would determine that the total value is £1,500.
