Market capitalization

How it is used

Often shortened to 'market cap'. Analysts use it to compare company size and to group companies into large-cap, mid-cap and small-cap. News reports say a company's market capitalization reached or passed a certain level, such as one trillion dollars.

Example sentences

1. With a market capitalization of 2 billion dollars, it is one of the largest companies in the sector.

2. The index is weighted by market capitalization, so the biggest companies have the most influence.

Common collocations

• market capitalization of
• total market capitalization
• market cap
• large market capitalization

Related terms

• share priceThe amount of money one share of a company costs on the market at a given moment, set by the orders of buyers and sellers.
• small-capDescribing a company with a relatively small market capitalization, or its shares. The exact limit depends on the market and the index provider.
• free floatThe part of a company's shares that can actually be traded on the market, excluding shares held by controlling owners, the state or other long-term holders.
• P/E ratioShort for price-to-earnings ratio: a company's share price divided by its earnings per share. It shows how much investors pay for each unit of yearly profit.
• indexA number that shows how the prices of a selected group of shares or bonds change over time, used to measure a whole market or sector.

More terms: Valuation & Ratios

• earnings per share
• book value
• price-to-book ratio
• overvalued
• undervalued
• return on equity