The total value of all a publicly listed company’s shares of stock (shares outstanding). It is the total value of a publicly traded company‘s outstanding common shares presently held by its stockholders. Market capitalization is calculated as the market price per common share multiplied by the number of common shares outstanding. For example, a company with 10 million shares selling at $20 per share would have a market capitalization of $200 million.

It measures a company’s value using two key inputs: number of shares outstanding and current market value per share. Hence, it gives a precise indication of a company’s size as determined by market measures (market value). In terms of market capitalization, companies are classified as large caps (market value between $10 billion and $200 billion), mid-caps (market value between $2 billion and $10 billion), small-caps (market value between $250 million and $2 billion; and micro-cap (market value of less than $250 million).

Market capitalization is also known as market cap or marketcap.