Capitalization

Capitalization - Capitalization has two meanings when it comes to corporations. The first one pertains to the sum of a corporation's long-term debt, retained earnings, and debt, and is generally known as invested capital as well, because it affects the owner equity and is used in equations to calculate the company's financial stability. The second one pertains to the market price of the entire company, which is calculated by multiplying the price per share by the number of shares outstanding. This is also called the market cap or market capitalization. Either of these meanings involve the company's stability and the owner's equity.