What is market cap and why does it matter?

But what is this, and why does it matter? Market capitalization, or market cap, is one measurement of a company's size. It’s 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.

What is a large cap company?

Large cap (big cap) refers to a company with a market capitalization value of more than $10 billion. Market value of equity is the total dollar value of a company's equity calculated by multiplying the current stock price by total outstanding shares.

What is market capitalization?

Market capitalization refers to the total dollar market value of a company's outstanding shares of stock. Commonly referred to as "market cap," it is calculated by multiplying the total number of a company's outstanding shares by the current market price of one share.

How is market cap calculated?

Since it represents the “market” value of a company, it is computed based on the current market price (CMP) of its shares and the total number of outstanding shares . Market cap is also used to compare and categorize the size of companies among investors and analysts.