Market Capitalization

Definition: Market Capitalization (Market Cap) is the total market value of a company's outstanding common stock, calculated as Market Price Per Share × Shares…

Market Capitalization (Market Cap) is the total market value of a company's outstanding common stock, calculated as Market Price Per Share × Shares Outstanding. It is the equity-value piece of Enterprise Value (EV = Market Cap + Total Debt − Cash and Cash Equivalents). Market Cap is used to classify companies (small-cap, mid-cap, large-cap), to construct equity indexes (typically market-cap weighted), and as the numerator in the Price-to-Sales ratio (Market Cap / Net Sales).