Market Cap In 60 Seconds

Market Cap is the best way to determine (and compare) the financial size of a publicly traded company.


Definition

Market Capitalization is simply the market value of a company's outstanding shares.

Each company has a specific amount of shares available to be bought and sold.

It is sometimes referred to as the float.

Formula

This figure is found by taking the current stock price and multiplying it by the total number of shares outstanding.

Market Capitalization = Stock Price X Number of Shares Outstanding

Calculation

To calculate the market cap of a publicly traded company, simply multiply the stock price by the total number of shares outstanding.

For example, a company has 1,000,000,000 shares outstanding with a stock price at $50 per share.

The market cap for this company is $50,000,000,000 or $50 Billion.

Size Categories

There are 3 popular terms to categorize companies by market value.

  • Small Cap - Small Caps are generally companies with a market capitalization of between $300 million and $2 billion.
  • Mid Cap - Mid-caps are typically defined as companies with market caps that are between $2 billion and $10 billion.
  • Large Cap - Large cap or big cap refers to a company with a market capitalization value of more than $10 billion. (All of the dow jones stocks are large-cap stocks.)

Ranking

One of the benefits of market cap is to use it as a way to compare companies.

There is a comprehensive list of the Largest Companies By Market Capitalization as well.

Apple, Amazon, Facebook, Google, Microsoft & Tesla

Below is a table that shows the Market Cap as well as other relevant information regarding these popular stocks.