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What is the significance of market capitalisation and  how is it calculated? 

Market cap refers to the total worth of a company's outstanding shares of stock, simply put how much will it cost to buy the entire company at the current share price.

For investors who are monitoring stocks and thinking about potential investments, market capitalisation can be a helpful tool.

Fundamentally, market capitalisation represents the public's assessment of a company's value. 

It is calculated by multiplying the current market value of each share of the company by the number of outstanding shares.


So heres the formula, 'Current market share price X Outstanding shares'. 

Market capitalisation is important because it represents what the market is willing to pay for the shares.

Why is Market capitalisation important? 

Market capitalisation fluctuates on a daily basis because as its directly linked to a company's stock price.


Check out the categories of market cap here.

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What is the significance of market capitalisation and how is it calculated?

For investors who are monitoring stocks and thinking about potential investments, market capitalisation can be a helpful tool. In acquisitions, the market cap is used to determine whether a takeover candidate offers a good value to the acquirer.

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What is the significance of market capitalisation and how is it calculated?

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