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.
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However, the overcapitalization of the fossil fuel industry
H0: There is a negative and significant relationship between quality of financial reporting and overcapitalization.
If those shares are transferable among fishery participants, quota shares will be reallocated to the most efficient fishery participants, thereby reducing the overcapitalization of the fishery.
Those countries with higher subsidies designed to increase fishing revenue, or lower the costs of fishing and thus enhance productivity, recorded higher losses due to overfishing and overcapitalization. A percentage increase in capacity enhancing subsidies, all else being equal, is associated with an increase in catch loss per square kilometer within the exclusive economic zone of between 0.22-0.27 per cent.
Overcapitalization, high surplus and low-investment returns are keeping insurance rates out of balance and masking the true state of the market, according to two industry executives.
Nevertheless, debt financing is criticized sometimes as creating an incentive for overcapitalization by sub-national governments if the individual voters who approve projects do not perceive their future costs (Fisher, 2007).
One way of characterizing these losses is to infer an overcapitalization of capital goods or overbidding for the capital goods committed to the strategy.
revenue > initial Initial cost> initial costs-- revenue Causes Causes fair overcapitalization capitalization overtime.
The consequence was "overcapitalization." The capital market effects of the Fed's easy money policy spilled over into other sectors of the economy.
In an effort to avoid overcapitalization on chance and random error, we only classified schools as positive or negative outliers if they exhibited large residuals in the same direction on both the reading and math achievement tests, and we feel that researchers who make use of this technique are well-advised to triangulate their data in this fashion.
For example, when conducting the research, 74% of the executives interviewed said, "overcapitalization in the credit union system does not encourage efficiencies," and Taylor wondered what percentage would say the same thing now.
High fishing intensity, overcapitalization, negative environmental impacts, and gear conflicts characterized the fishery until the Florida Legislature enacted a trap reduction program in 1991.