Question

Which of the following is NOT an indicator of over

Q: Answer-Which of the following is NOT an indicator of over capitalization?

Overcapitalization refers to a situation wherein the value of a companys capital is worth more than its total assets. As such when future earnings are underestimated, the value of capital is lower than its total asset and is therefore not an indicator of over capitalisation.

capitalization?

A Capital invested in a business exceeds the real value of its assets

B Earnings are not justified by the amount of capitalization

C The future earnings are underestimated at the time of promotion

D A business has more net assets than it requires

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Which of the following is NOT an indicator of over

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