Market capitalisation
Market capitalisation is the market value of all a company's shares: the share price multiplied by the number of shares outstanding. It is the standard measure of a company's size and determines whether it counts as large, mid or small cap, which in turn shapes its liquidity and its presence in indices.
How it is calculated
Market cap = share price × shares outstanding. At €25 a share with 400 million shares, that is €10,000M. It recalculates itself on every tick because the price moves; the share count only changes with issues, buybacks or splits. A split does not alter it: twice the shares at half the price gives the same figure. It is used mainly to classify by size and to know a stock's weight inside an index, because almost every index weights by market cap —and many by free float rather than the total.
The figures in the example are invented and rounded so the arithmetic can be redone by hand. They are not data from any real company.
What it is NOT
It is not what the company is worth, nor what it would cost to buy: that is what EV is for, adding debt and subtracting cash. It is not money the company holds, nor what it raised at its IPO. And it is not what is actually available to buy: a good part of those shares sit in hands that do not sell, and what really circulates is the free float.
Formula
Capitalización = precio × acciones en circulación See also
Enterprise value (EV) · Free float · Stock split and reverse split
See it on real data
Celsmar computes this from the accounts companies file with their regulator, and shows which line every figure comes from. Free to start, no card.
Definition for informational purposes. It is not financial advice nor a recommendation to buy or sell.