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 business without outside help. Underfunded companies often rely on short-term loans 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 investment 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 loan. (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. bank 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 finance 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. factoring. 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. Commercial Bank B. Venture capital 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