Market Capitalization

Market Capitalization, often referred to as “market cap,” is the total value of a company’s Shares/">Outstanding Shares of Stock. It is calculated by multiplying the current Share price by the total number of Shares/">Outstanding Shares. Market Capitalization is used as a measure of a company’s size and is an important factor for investors when evaluating the value and growth potential of a company.

For example:

  • If Company A has 1 million Shares outstanding and the current Share price is $50, its market Capitalization would be $50 million (1,000,000 Shares x $50/Share).
  • If Company B has 500,000 Shares outstanding and the current Share price is $200, its market Capitalization would be $100 million (500,000 Shares x $200/Share).

Market Capitalization can be classified into different categories:

  • Large-cap: Companies with a market Capitalization of $10 billion or more.
  • Mid-cap: Companies with a market Capitalization between $2 billion and $10 billion.
  • Small-cap: Companies with a market Capitalization of less than $2 billion.