Investing term

What is Market capitalisation (market cap)?

Share price × shares outstanding — what the market says the whole company's equity is worth.

The standard measure of company size, and the one most often misread. Because it takes two inputs and only the share price is visible on a ticker, people treat the share price as a proxy for size — but a company chooses how many shares to divide itself into, so the two are unrelated. A stock split changes the price and the share count in opposite directions and leaves market cap untouched, which is the cleanest proof that the price alone says nothing. Market cap prices the equity only: add debt and subtract cash to get enterprise value, the price of the whole business.