Definition

1. Noun:
   • An estimation of the value of a business: Market capitalisation is a financial metric used to estimate the total market value of a company's outstanding shares of stock.
   • Calculated by share price times shares outstanding: It is obtained by multiplying the total number of a company's outstanding shares by the current market price of one share.

Usage

• Market capitalisation is a key indicator used by investors to categorise and compare the size of publicly traded companies.
• It is often used to classify companies into categories such as large-cap, mid-cap, and small-cap.
• The figure represents the public's perception of a company's net worth and can fluctuate with its share price.

Examples

• Noun:
  • The company's market capitalisation soared after the positive earnings report.
  • Investors often consider a firm's market capitalisation when assessing its stability and growth potential.
  • With a market capitalisation of over $2 trillion, it is one of the world's most valuable companies.

Advanced Usage

• "To reach a market capitalisation of": To achieve a specific total valuation.
  • The tech startup aims to reach a market capitalisation of $1 billion within five years.
• "Market capitalisation-weighted index": A type of stock market index where each component's influence is proportional to its market capitalisation.
  • The S&P 500 is a prominent market capitalisation-weighted index.

Variants and Related Words

• Market capitalization (noun): The standard American English spelling of the term.
• Market cap (noun): A common informal abbreviation for market capitalisation.
• Capitalisation (noun): In finance, the total value of a company's outstanding shares; can also refer to the total sum of a company's long-term debt and equity.

Synonyms

• Market value: The price at which an asset would trade in a competitive auction setting; often used interchangeably with market capitalisation for equity.
• Market cap: The abbreviated form.

Related Phrases

• "Large-cap stock": A stock of a company with a large market capitalisation, typically over $10 billion.
• "Mid-cap stock": A stock of a company with a medium market capitalisation, typically between $2 billion and $10 billion.
• "Small-cap stock": A stock of a company with a small market capitalisation, typically between $300 million and $2 billion.

Noun

1. an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share