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Definitions from WordNet

Definitions from the Web

Overcapitalization

Definition:

Noun: Overcapitalization refers to a situation where a company or project has an excessive amount of capital or assets compared to its earning potential or market value.

Sense 1:

Noun: In finance, overcapitalization occurs when a company has an inflated capital structure, resulting in an imbalance between its assets and liabilities.

Example sentence: The company's overcapitalization led to financial distress as it was unable to generate enough profits to cover the interest on its loans.

Sense 2:

Noun: Overcapitalization can also refer to a situation where a company has invested more money in a project or asset than necessary, leading to inefficient use of resources.

Example sentence: The real estate project's overcapitalization resulted in high costs and delayed completion, causing significant financial losses for the developers.

Sense 3:

Noun: Locally, overcapitalization may denote the situation wherein a business or industry within a specific region has an excess of financial resources compared to the market demand.

Example sentence: The overcapitalization of the local manufacturing sector led to fierce competition and declining profits for businesses operating in the region.