What is market capitalization (market cap)?

Market Capitalization (Market Cap) is the most recent market value of a company’s outstanding shares. Market Cap is equal to the current share price multiplied by the number of shares outstanding. The investing community often uses the market capitalization value to rank companies

What is a market cap & how do you calculate it?

Shorthand for "market capitalization," market cap is one way an investor can evaluate how much a company is worth. Market cap refers to the total value of a publicly traded company's shares. To determine a company's market cap, simply multiply the share price by the number of shares outstanding. Here's Costco Wholesale ( NASDAQ:COST) as an example.

Why is market cap important?

Market cap can be a valuable tool for an investor who is watching stocks and evaluating potential investments. Market capitalization is a quick and easy method for estimating a company's value by extrapolating what the market thinks it is worth for publicly traded companies.

Should market cap be your only tool?

Market cap can be one tool you use to develop a diverse portfolio, but it shouldn't be your only tool. Market capitalization, or market cap, is one measurement of a company's size. It is the total value of a company's outstanding shares of stock, which include publicly traded shares plus restricted shares held by company officers and insiders.