Market capitalization, often referred to as "market cap," is a financial metric that quantifies the total value of a publicly traded company's outstanding shares of stock. It is a key indicator of a company's size in the financial markets and is calculated by multiplying the current market price of one share by the total number of outstanding shares. In essence, market capitalization represents the collective market value that investors and the public attribute to a company.
The calculation of market cap is straightforward: it involves taking the current market price per share and multiplying it by the total number of outstanding shares. Companies with a higher market capitalization are generally considered larger and more valuable in the eyes of investors. Market cap is a crucial measure for investors and analysts to assess the relative size and significance of different companies within a given market or industry.
