Market Capitalization
The total market value of a company's outstanding shares. Market Cap = Share Price × Shares Outstanding.
Market Cap = Share Price × Shares Outstanding
Market capitalization is the most widely used single number to size a company. It represents what the public market collectively says the entire business is worth at the current moment.
Market cap drives index inclusion, ETF weighting, and investor mandates (many funds are restricted to large-cap or small-cap). It is also the starting point for valuation comparisons between companies in the same sector.
Market cap alone does not capture debt. Enterprise value adds net debt to give a truer acquisition cost, which is why analysts often prefer EV-based multiples (EV/EBITDA) to market-cap-based ones (P/E) when comparing capital-intensive businesses.
On the desk
Apple has ~15.4 billion shares outstanding trading at $200. Market cap = 15.4B × $200 = $3.08 trillion. A small startup with 5 million shares at $10 each has a $50 million market cap — micro-cap territory.