Market Capitalization Formula
The Market Capitalization Equal to price of share multiple number of outstanding shares.Market capitalization calculator is a tool that helps you calculate market capitalization (market cap in short) – the total value of a company’s outstanding shares
The formula us,
Market capitalization = price of share * number of outstanding shares
let us consider,
- Current price of a single share;
- Number of outstanding shares of a company (the ones currently owned by the shareholders).
Let’s analyze an example of a company that has been on the market for a few years now. We’re aiming to determine whether it’s a large-cap, medium-cap, or a small-cap company.
- Find out how many outstanding shares the company has. Let’s assume it’s 20 million shares.
- Determine the current price of one share. We can say the company sells them at a price of 200$ per share.
- Multiply the number of shares by the price, according to the market capitalization formula:
20M * $200 = $400M = $4B
- The market capitalization is equal to $4 billion.