Market Capitalization

Market capitalisation, often abbreviated as “market cap,” is a financial metric used to evaluate the size or value of a publicly traded company. It is calculated by multiplying the current market price of a company’s outstanding shares of stock by the total number of those shares.

In simple terms, it represents the total value of a company’s equity in the stock market. Companies with higher market capitalisations are generally considered larger and more established in comparison to those with lower market caps.

Market capitalisation is often used to categorise companies into different size classes, such as large-cap, mid-cap, and small-cap. These classifications help investors and analysts assess the risk and growth potential of different investment opportunities.

It’s important to note that market capitalisation is just one factor to consider when evaluating a company’s investment potential, and it should be used in conjunction with other financial metrics and analysis.