Capitalization

Capitalization has multiple meanings. In investing terms, it usually refers to the way in which a company is funded...how much of the company's capital came from debt and how much came from equity. Here, capitalization refers to a company's financial or capital structure and is a quantitative analysis used by financial advisors and savvy investors to determine a company's viability. Simply put Stock + Earnings - Long Term Debt = Book Value. And hopefully the value is good.

Meanwhile, in accounting terms, capitalization refers to the methodology used to record the expense of certain assets. Instead of recording the expense of the asset during the period in which it was incurred, accountants spread the cost over a longer duration, typically over the life of the asset.