Overcapitalization

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Overcapitalization

Said to occur when a firm cannot service its debt even though its debt/equity ratio is not excessive.

Overcapitalization

A situation in which a company has too much capital. An overcapitalized company has an excessive amount of cash or liquid assets; it may find itself in a position, for example, of paying high dividends that it would have difficulty reducing in the future. Its earnings may or may not adequately reflect the capital invested in the company. An overcapitalized company may repay its debt or make a tender offer for shares in order to reduce its capital.
References in periodicals archive ?
They are overcapitalized and under-leveraged"--in short, they are in the catbird seat.
com), a Seattle VC that invests in small companies, says the huge funds have so much money to invest that many of their clients are overcapitalized.
By 1992, a vastly expanded and overcapitalized Atlantic fleet had done what the foreign factory trawlers had failed to do.
factory trawlers from the overcapitalized Alaskan fleet, as well as to international joint ventures.
The chief problem is that shrimping is a very overcapitalized industry.
Insurance companies sense that the time has arrived to use capitated payment to force a competitive mode of doing business with hospitals and physicians, who often find themselves overcapitalized and under-utilized.
On my final groundfish trip in northeast Newfoundland (1990), I trawled for cod alongside seventeen vessels of the overcapitalized Canadian offshore fleet, all of us catching predominantly undersize fish to help plant workers reach unemployment eligibility.
However, a non-LIFO taxpayer that overcapitalized UNICAP costs in the prior year may be better off adopting the historic absorption ratio going forward to avoid the negative Sec.
This is an excellent opportunity to monitor the stages of exploitation and ensure that snapper stocks will not be overexploited and the fisheries will not be overcapitalized.
Attributes Destruction of Shareholder Value to Misguided M&A Strategy, Bloated SG&A Cost Structure and Overcapitalized Balance Sheet
The influx of alternative investments into reinsurance has caused some to believe that the industry is overcapitalized, and may eventually drive down reinsurance pricing.
Reserve redundancy is beginning to climb again, however, and the industry remains overcapitalized.