Undercapitalization refers to the problem of insufficient start-up funds

Continue (redirected from subcapacitation) Also found in: Dictionary, Wikipedia.Related to undercapacity: the overcapacity company does not have enough capital to perform its usual functions. Copyright © 2012, Campbell R. Harvey. All rights reserved. Describe a company that doesn't have enough capital to maintain a without outside help. Underfunded companies often rely on short-term for financing, although at some point they can issue stocks or bonds to raise capital. Farlex financial dictionary. © 2012 Farlex, Inc. All rights reserved, relating to or are a company that does not have sufficient long-term capital to support its assets. A fast-growing company that finds itself in the financing business primarily with short-term loans can be underfunded. Words from Wall Street: A-Z guide to conditions for today's investor David L. Scott. Copyright © 2003 by houghton mifflin. Posted by Houghton Mifflin Company. All rights reserved. All rights reserved. Would you like to thank TFD for its existence? Tell a friend about us, add a link to this page or visit the webmaster page for free entertainment content. Link to this page: <a href= amp;gt;Undercapitalized</a> But part of the court's opinion discussed the circumstances in which credits for stamp duty can be considered capital contributions. (59) The Court has established such two circumstances: if the Commissioner demonstrates an initial subcapacity or if the trustee proves that the loans were made when no other disinterested lender would extend the . (60) On the basis of that test, the court found that the Commissioner did not bear his burden and therefore Estes's application was admissible, albeit as a subordinate debt. Typically, only highly valued customers with financial stability receive ______. A. Secured loans B. premium C. unsecured loans D. commercial paperC. unsecured loansA firm company negotiates a(n) ______with its bank. This arrangement gives the company access to a certain amount of unsecured short-term funds, provided that the bank has the funds available. A. Account for asset extraction B. capital draw contract C. reserve account D. line of creditD. Credit Lines By selling a stake in its company, California Scientific acquires the funds needed to their research and development projects. California Scientific anticipates their long-term financing needs through financing ______A. debt B. equity C. retained by D. assetsB. equityU efficient budget requires: A. a successful advertising campaign. B. accurate forecasts. C. approval of the administration. D. stakeholder consensus.B. accurate forecasts. Delaware Aluminum uses a stockpile of unsold aluminum products as collateral for short-term credit. This arrangement A. secured loan. B. Revolving credit agreement. C. . D.D. unsecured loan.A. secured credit. By lending $10 million from First Dayton Bank, Hi-Lo Industries uses ______. A. Equity financing. B. Debt financing. C. Financing liability. D. financing of assets.B. debt financing. The rationale offered to customers is: A. Allowing customers to pay with credit cards or credit makes it easier for them to buy, and attracts new customers. B. The offer of a customer loan helps in the position of cash flow of the company. C. The offer of a customer loan helps to align revenues with costs for the same period of time. D. Allowing customers to pay with credit cards or credit cards forces the company to rely less on receivables and more on accounts that pay.A. Allowing customers to pay with credit cards or on credit makes it easier for them to buy, while also attracting new customers. If a company secures a three-year bank loan, ______A. short-term financing of B. asset financing C. financing liabilities D. long-term financing shall be considered. long-term financingWhat is the source of short-term financing from the next? A. Retained earnings B. Commercial paper C. Common shares D. Corporate bondsB. Commercial paperWhat are these statements about corporate bonds correct? A. Bonds provide equity financing. B. The issuance of new bonds diminishes existing ownership in the company. C. Interest paid to bondholders represents a tax deductible business expense. D. Debentures require assets promised as collateral.C. Interest paid to bondholders represents a tax deductible business expense. The general objective of financial planning is: A. to anticipate the impact of technological trends. B. prepare financial statements for managers. C. Optimize the profitability of the company. D. establish budgets for financial control.C. optimize the profitability of the company. Which of the following companies is underpack? A. A large corporation that has been hit by a major lawsuit because one of its products has a design flaw that has led to serious injury B. A new company is struggling because it does not have enough start-up funds C. Medium-sized company that has decided to buy out smaller competitor D. Elektroprivreda, which has recently experienced a significant increase in the cost of coal and workforce B. A new struggling company because it doesn't have enough start-up fundsA ______forecast predicts the revenue, costs and costs the company will incur for more than a year. A. Cash flow B. short-term C. capital expenditures D. long-term D. long-term Andercapitalisation refers to a problem: A. insufficient funds for start-ups. B. Inadequate cost control. C. Unsuitable cash flows. D. undervalued capital stock.A. insufficient initial funds.______refers to a process that identifies derogations by comparing actual and costs with projected revenues and expenditures. A. Analysis of factor B.B. C. Financial Planning D. Financial Control. Financial controlsNeeness of business size, finance are a critical activity for: A. profit-seeking, but not for nonprofits. B. for-profit and non-profit organisations. C. nonprofits, but not for companies looking for profits. D. accountants, but not for financial managers.B. for-profit and nonprofit organizations. What of the following usually results in a financial failure of a company? A. Diversification B. Subcapitalization C. Cost Control D. Management of cash flowsB. The subcapacity of the rate of return that a company must earn to meet the requirements of its lenders and the expectations of its equity holders is called: A. opportunity rate. B. kept the profits. C. Cost of capital. D. acquisition cost.C. cost capital. A(n) ______is responsible for verifying that the accounting procedures within the company comply with established accounting principles. A. managerial accountant B. tax accountant C. accountant D. internal auditor D. Internal Auditor Virginia Supply offers its clients a trading loan with terms of 2/15 net 30. This implies that: Virginia customers have very little incentive to pay in the discount period. B. Payment within 30 days will allow the customer to deduct 15% of the price of the account. C. Most customers will pay their bill within 2 days to get the maximum discount. D. the annual cost of financing non-payment within 15 days is about 48%.D. The annual cost of financing non-payment within 15 days is about 48%. Money has a timeline because: A. inflation increases the value of money over time. B. Money earns interest over time. B. Monetary systems are more automated than in the past. C. dollar received today is worth more than the dollar received yesterday.B. money earns interest over time. To help generate revenue, a(n) ______allocates resources throughout society. A. Forecast B. Balance Sheet C. Budget D. Profit and Loss Account C. budgetA ______represents a long-term debt obligation issued by the corporation or government. A. Share B. commercial note C. certificate of deposit D. bondsD. bondCharging paid on ______represents a tax deductible business expense. A. B. stock C. bonds retained D. depreciated assets. Bonds Effective receivable management requires financial managers to: A. review the credit history of new customers. B. ensure quick cash payments to suppliers. C. allow customers more time to pay for their past account maturities. D. Refuse bank credit cards.A. review the credit history of new customers. What of the next shows the company's plans to spend on fixed assets such as large equipment? A. Capital budget B. Operating budget C. Cash budget D. Budget surplusA. Capital BudgetsCarolina Financial consider buying and installing computer networks. This is the type of expenditure that would be included in a(n): A. capital budget. B. cash budget. C. operating budget. D. Asset Budget.A. Capital budget.______provide financing to new or new companies with high profit potential. In return, these organizations expect a share of ownership in the company. A. B. company C. Federal Reserve Bank D. Investment BankersB. Venture capital companyHia business function includes credit management/fundraising from customers? A. Accounting B. Production C. Marketing D. Funded. FinancialWhy the following tax statements are correct? A. Taxes represent an influx of money to companies. B. Profitable companies usually pay tax. C. Tax management falls within the responsibility of marketing managers. D. Taxes cannot be managed due to fluctuations in politics.B. Profitable companies usually pay taxes. Undercapacity is a situation where a company does not have sufficient resources, or capital, to support its business. While undercapacity can affect any business, it is particularly common and problematic for small . In fact, undercapacity is one of the warning signs of major financial problems for small businesses, as well as a significant cause of failure. Undercapacitation also works to limit the growth of many small businesses, as without enough capital they cannot afford the needed to expand. In this way, undercapation can be a problem even for profitable small businesses. What separates a successful entrepreneur from a failed one? In many cases, the question of whether a potential business owner seems to have access to sufficient funds, Brian Hamilton wrote in the publication Small Business Administration Financing for the Small Business. Without sufficient capitalization, companies are unwilling to ride out slow periods in the business cycle, or to resist a new competitor, or to work through any number of shocks that buffet all companies from time to time. There are a number of factors that determine how much capitalization any small business needs. Companies that offer the service typically require less resources than those that produce the product. Similarly, companies where owners do most of the work typically need less capital upfront than companies with employees. The initial capitalization of the company also depends on the ability of the entrepreneur to invest personal funds and ustind a good business plan. In order to avoid future problems with undercapacitacionalisation, entrepreneurs need to carry out a realistic assessment of their costs and financial needs. Some of the main costs facing the new company include renting the property; wages and salaries; equipment and tools; supplies, utilities; ; advertising; and business On the basis of this information, the undertaking should prepare a monthly cash flow projection for the first year. The difference between the funds the undertaking can contribute, the amount of income expected from the business and the costs anticipated to be incurred by the business gives a rough estimate of the financial needs of the business. Ideally, the entrepreneur will provide the necessary capital from different sources to make a difference and ensure the business sufficient capitalization. Managing cash flows is an important aspect of staying ahead of the capital needs that a growing company can have. The aim of managing cash is to manage a company's cash balances by maximising the availability of cash that is not invested in fixed assets or stocks and to do so in such a way as to avoid the risk of insolvency. Factors tracked as part of cash management include the company's liquidity level, cash balance management and short-term investment strategies. Cash is the lifeblood of the business. Managing it effectively is key to success. In a way, managing cash flow is the most important job of business managers. If at any time the company does not pay the liability when it arrives due to a lack of cash, the company is insolvent. Insolvency is the main reason companies go bankrupt. Obviously, the prospect of such a terrible consequence should force companies to manage their money with care. Moreover, efficient cash management means more than preventing bankruptcy. It improves profitability and reduces the risk the company is exposed to. Cash management is particularly important for new and growing businesses. Cash flow can be a problem even when a small company has many clients, offers a product superior to those offered by its competitors and enjoys a great reputation in its industry. Companies suffering from cash flow problems do not have a safety limit in the event of unforeseen costs. They may also have trouble finding the means to innovate or expand. It is, somewhat ironically, easier to borrow money when you have money. For this reason, planning in advance is essential. Knowing when new funds will be needed and providing these funds before need is far easier than approaching a bank after the financial crisis in business. A little-known problem associated with undercapacity is that it can increase the likelihood of corporate owners being personally responsible for business matters. One of the main reasons entrepreneurs choose the corporate form of business organization is protection against personal liability for business debts and judgments. However, installation does not provide automatic protection. Business owners can be held personally accountable in a number of situations, including where personal and corporate assets are aggregated, the corporation does not keep adequate records or corporate owners deliberately deceive their creditors. But perhaps the most critical factor in determining whether there should be personal liability for corporate debts is whether the owners have secured sufficient capitalisation for the business. The ultimate test is whether there are enough corporate assets to meet corporate obligations. For example, an entrepreneur couldn't give just $500 to start a new business, knowing that an initial capital expenditure of $10,000 was actually needed and expected to have his personal assets protected in case the business became insolvent. In this case, the court is likely to rule that the corporation's extreme undercapacity has made the owner personally liable for his debts. Baldwin, John R. Innovation strategies and performance in small businesses. Edward Elgar Publishing, February 2004. Cannella, Cara. Where the really comes from. Date of death: 15 April 2003 Detamore-Rodman, Crystal. You going somewhere? Keeping a financial travel map in your company's back pocket is always a capital idea. Entrepreneur. In December 2002, he was jailed for 12 years. Ellison, Mitch and Neil E. Seitz. Decisions on capital budgets and long-term financing. HBJ, 1999. Gage, Jack. To live within your means. Forbes. December 26th, 2005 Hommel, Ulrich, and Michael Frenkel, Markus Rudolf, eds. Springer, 2005. Hosford, Christopher. Sales strategies for small businesses: Small businesses can struggle with undercapacity, lack of sales savvy, not even taken seriously. Sales & Marketing Management. In April 2006, he was jailed for 12 years. Kono, Clyde. Bank on it: Cash flow management. Hawaiian business. August 2004 The U.S. Small Business Administration. Hamilton, Brian. Financing the small economy. 1990. 1990.

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