Difference between capital and capitalisation
Dear Student,
Capital and Capitalisation both are different terms as both point towards different contexts. Capital is the total amount of investment of the company in form of money, assets, etc. This capital also includes any profits or losses that arises from use of capital so invested in the business. In other words, we can say capital is the wealth of the business.
However, capitalisation is altogether different thing. Capitalisation refers to amount that has been kept by the business for meeting permanent long term needs. It includes face value of long terms securities plus the value of reserves retained by the company.
To be brief, we can say capital includes all loans plus reserves of the business and capitalisation includes only long term loans and profits so retained.
Capital and Capitalisation both are different terms as both point towards different contexts. Capital is the total amount of investment of the company in form of money, assets, etc. This capital also includes any profits or losses that arises from use of capital so invested in the business. In other words, we can say capital is the wealth of the business.
However, capitalisation is altogether different thing. Capitalisation refers to amount that has been kept by the business for meeting permanent long term needs. It includes face value of long terms securities plus the value of reserves retained by the company.
To be brief, we can say capital includes all loans plus reserves of the business and capitalisation includes only long term loans and profits so retained.