Market capitalization

Market capitalization

Indicator of a company's current market value.

The market capitalization is calculated by multiplying the current market price of a stock with the number of outstanding shares. Because an increase in a market capitalization often implies a concomitant rise in the volume of shares traded, it serves as a measure for assessing the trading volume and the market liquidity of a company. The market capitalization of a stock exchange is equivalent to the total market capitalization of all listed companies and is often an indicator of its size. The market capitalization can be calculated for individual sectors or for the stock market as a whole.

Additional Information

Worth knowing?

Consult the glossary for another term...