overcapitalise

Thân thiện

A company should not overcapitalise its assets.

Definition

1. Verb (Transitive):
   • To provide more capital for (a business or enterprise) than is justified by its actual worth or profit-making potential: This refers to investing an excessive amount of money into a company relative to its realistic value or earnings capacity.
   • To estimate the capital value, market value, or potential profitability of (a company or asset) at an unreasonably high level: This involves an overvaluation, which can be due to error or, in some contexts, unlawful intent.

Usage Examples

• Verb:
  • The investors were advised not to overcapitalise the startup, as its current revenue could not support such a large investment.
  • The accountant warned that the firm had overcapitalised its new factory, tying up funds that were needed elsewhere.
  • It is a common mistake for new entrepreneurs to overcapitalise their ventures in the first year.

Advanced Usage

• In a regulatory or legal context: The term can imply an unlawful or fraudulent overvaluation.
  • The audit revealed an attempt to overcapitalise the holding company to secure a larger loan.

Variants and Related Words

• Overcapitalize: The standard American English spelling. The meaning is identical to "overcapitalise" (British English spelling).
• Overcapitalisation/Overcapitalization (Noun): The state or process of being overcapitalised.
  • The company's failure was due to severe overcapitalisation.

Synonyms

• Overfinance: To supply with more funds than necessary or prudent.
• Overvalue: To assign an excessively high value to something.

Antonyms

• Undercapitalise/Undercapitalize: To provide with insufficient capital.
• Undervalue: To estimate the value of something as being lower than it actually is.

Related Phrases

• "To be overcapitalised": Describes the state of a company that has more capital assets than it can profitably use.
  • The firm was struggling because it was overcapitalised and burdened with debt.

Học thuật

Verb

1. capitalize beyond what the business or the profit-making prospects warrant
2. overestimate the market value of
   • overcapitalize a property
3. estimate the capital value of (a company) at an unreasonably or unlawfully high level

Từ đồng nghĩa

• overcapitalize