Transforming something into capital is called capitalization.
The act and consequence of capitalizing is called capitalization : taking advantage of something for one's own benefit. In the specific context of the economy, capitalizing means transforming something into capital or providing capital to a company.
To understand what capitalization is, therefore, we must first know that, in the economic field, capital is the asset or good whose function is to generate wealth . Capitalization, in short, aims to provide capital or to convert something into capital .
The market capitalization
Market capitalization , also known as market capitalization , is the value of all the shares of a company, market, or industry. This value is estimated from the stock market price.
It can be said that market capitalization represents the company's equity that is available for sale and active purchase through the stock market . This capitalization is equivalent to the price per share at a certain time, multiplied by the number of shares that are outstanding. If there are 10,000 shares of a company outstanding and each share is worth $50, the market capitalization of the company in question is $500,000.
The market capitalization of a company is equivalent to the value of all its shares.
Simple or compound
Simple capitalization is the procedure followed when capital changes are not cumulative. This means that the interest generated in each period is not added to the capital when calculating the new interest for the following period: that is why the interest is proportional to the capital available and the period .
Compound capitalization , on the other hand, involves the periodic accumulation of interest on capital, in turn generating more interest.
Capitalization of unemployment
In the same way, it must be clear that in Spain there is also what is known as capitalization of unemployment or capitalizing unemployment. Basically we can establish that it is a measure implemented with the clear purpose of encouraging unemployed citizens to become self-employed professionals and can begin to undertake, to become self-employed.
The measure it consists of is allowing a person to advance their pending unemployment payment as long as they are going to use it as an advance for an entrepreneurial activity.
The people who can access this capitalization are those who are going to join a cooperative as working members, those who are going to register as self-employed and those who are going to use the amount of the benefit to be able to contribute social capital to what is a commercial type. This entity, however, must have been created at least twelve months before the moment in which the money is contributed.
The term in the cryptocurrency sector
In the field of cryptocurrencies, capitalization has also taken on special prominence. Thus, in the market in order to know their status, it is common to analyze both their market capitalization and their diluted capitalization.
This last term refers to the value that each cryptocurrency is expected to have based on both its present and the possible appearance of other new cryptocurrencies that are not yet in circulation.