What is a company’s Market Cap?
(Also known as Market Capitalization)
A company’s market cap is how much the company is worth based on how many shares of stock a company has outstanding, and the price of those shares.
In order to get value of the company’s stock, go to a finance site like Yahoo Finance and search for the company.
Below we search for Intel.
That will give you the company’s main page, where Market Cap is located:
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Or, the Market Cap can be calculated manually using the stock’s share price ($21.48 as shown above) and multiplying the number of shares outstanding, which can be found on the income report located on the company’s latest 10-Q or 10-K report.
(click to enlarge)
Share price multiplied by the number of shares outstanding:
$21.48 x 4,999,000,000 = $107.4 Billion
The company’s Market Cap changes every time the price of the company’s stock changes. The Market Cap represents how much it would theoretically cost you to purchase the entire company at that instant.
The company’s Market Cap can be compared to its book value to see if the company is overvalued or undervalued. If the company’s Market Cap is below its book value, it may indicate a potential investment opportunity. However, it should not be a sole reason for investing in a company’s stock.
