Also known as market capitalization or invested capital, it may also be calculated as book value plus preferred stock. Sometimes market capitalization is distinguished from capitalization as the size of the corporation, measured by current price of the stock times the number of outstanding shares (as opposed to its financing). For example, if a company has 2,000,000 shares trading at $10 a share then its market capitalization is $20,000,000.

In terms of accounting, capitalization may refer to the price of an asset that includes the cost of its acquisition. For example, if a piece of equipment is recorded in the assets of the company as costing $1.5 million, but also incurred a $15,000 shipment fee, then the capitalized cost would be $1.65 million.

• preferred stock
• retained earnings
• market capitalization
• book value