Market Capitalization

Market capitalization, also known as market cap, is a measure of the total value of a company’s outstanding shares. It is calculated by multiplying the total number of a company’s shares by the current market price of one share. Market capitalization is used to measure the size of a company and is an important metric for investors to consider when evaluating a company’s stock.

History of Market Capitalization

The concept of market capitalization has been around since the early days of stock markets. It was first used in the late 19th century to measure the size of companies listed on the New York Stock Exchange. Since then, it has become a widely used metric for investors to evaluate the size of a company and its potential for growth.

Market capitalization is also used to compare companies within the same industry. For example, a company with a higher market cap than its competitors may be seen as a more attractive investment opportunity. Additionally, market capitalization can be used to measure the overall health of a sector or the stock market as a whole.

Table of Comparisons

Summary

Market capitalization is a measure of the total value of a company’s outstanding shares. It is calculated by multiplying the total number of a company’s shares by the current market price of one share. Market capitalization is used to measure the size of a company and is an important metric for investors to consider when evaluating a company’s stock. For more information about market capitalization, investors can visit websites such as Investopedia, Yahoo Finance, and The Motley Fool.

See Also

• Share Price
• Earnings Per Share (EPS)
• Price-to-Earnings Ratio (P/E Ratio)
• Price-to-Book Ratio (P/B Ratio)
• Dividend Yield
• Return on Equity (ROE)
• Return on Investment (ROI)
• Debt-to-Equity Ratio (D/E Ratio)
• Price-to-Sales Ratio (P/S Ratio)
• Market Value Added (MVA)

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