1. What is Market Capitalisation?

Market Capitalisation (or Market Cap) is the total market value of a company's outstanding shares. It is calculated by multiplying the current share price by the total number of outstanding shares. Market Cap is used to determine a company's size and is a key metric for investors.

2. How Does the Calculator Work?

The calculator uses the Market Capitalisation formula:

Where:

• Share Price — Current price of one share in dollars
• Outstanding Shares — Total number of shares currently held by all shareholders

Explanation: This simple multiplication gives the theoretical total value of all company shares at the current market price.

3. Importance of Market Cap Calculation

Details: Market Cap helps investors compare companies of different sizes. It's used to categorize companies as large-cap, mid-cap, or small-cap, which helps in portfolio diversification and risk assessment.

4. Using the Calculator

Tips: Enter the current share price in dollars and the total number of outstanding shares. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between Market Cap and Enterprise Value?
A: Market Cap only considers equity value, while Enterprise Value includes debt and cash in the company's valuation.

Q2: How often should Market Cap be calculated?
A: Market Cap changes constantly as share prices fluctuate throughout the trading day.

Q3: What are typical Market Cap categories?
A: Large-cap ($10B+), Mid-cap ($2B-$10B), Small-cap ($300M-$2B), Micro-cap ($50M-$300M), Nano-cap (<$50M).

Q4: Does Market Cap reflect a company's actual value?
A: It reflects the market's perception of value, which may differ from book value or intrinsic value.

Q5: How does share dilution affect Market Cap?
A: Issuing new shares increases outstanding shares but typically decreases share price, with net effect depending on why shares were issued.