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: