Financial Management Conspectus

Capitalization Meaning of capital. There 3 types of capitalization Over , Under and Water capitalization Under. Cost of Capital.

Finance is one of the important parts of business, plays a major role and can be classified into two major parts:

Public Finance which concerns with income and expenses of Government such as Central Government and Semi-Government Financial matters.

1.Wealth maximization considers both time and risk of the business concern.

(b) Working capital - the capital of a business which is used in its day-to-day trading operations such as: purchasing of raw materials, payment of wages, maintenance expenditure.

There 3 types of capitalization: Over, Under and Water capitalization

Causes . Under capitalization arises due to the following important causes:

Over: Situation where a firm has more capital than it needs. Thus, its assets are worth less than its issued share capital.