Market cap, or market capitalization, is the value of a firm as calculated by its shares outstanding multiplied by its price. This is essential the market's valuation of a company at a point in time. The following are common levels of market cap.
Mega CapFirms with a market capitalization over $300 billion.
Large CapFirms with a market capitalization over 10 billion. Most of the value of global stock markets is invested in large cap stocks. In many cases, people also refer to mega cap stocks as large cap.
Mid CapA market capitalization between $2 and $10 billion.
Small CapA market capitalization between $300 million and $2 billion.
Micro CapA market capitalization between $50 and $300 million.
Nano CapA market capitalization below $50 million. This represents a large part of the economy in many nations as small businesses that are privately owned often fall into this category.
FormulaMarket capitalization is calculated asmarket cap = # shares outstanding × price
Market Cap vs Enterprise ValueMarket cap isn't a good valuation metric because it doesn't reflect the full capital structure of a firm. For example, a 50 billion market cap for a large firm may seem like a great deal until you realize it has 500 billion in debt. Enterprise value is a more comprehensive metric that includes market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.
NotesThe ranges above have changed over time due to factors such as inflation and are likely to change in future.
|Definition|| The value of a firm as calculated by its shares outstanding multiplied by its price.|
|Also Known As|| Market Capitalization|
This is the complete list of articles we have written about investment analysis.
If you enjoyed this page, please consider bookmarking Simplicable.
A complete overview of enterprise value with examples.
A few articles about investing.
The definition of calculated risk with examples.
The common types of speculative bubble.
A complete overview of value investing.
The common types of wealth.
The definition of insider information with examples.
The definition of corporate action with examples.
The definition of short selling with examples.
The common types of long squeeze.
TrendingThe most popular articles on Simplicable in the past day.
Recent posts or updates on Simplicable.
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.