What is market capitalization? How to calculate market capitalization, and how to interpret market cap?

In this video, we start off with the definition of market capitalization, we go through an example of calculating market capitalization, discuss grouping companies by size of market cap, dive into the meaning of companies having a low market cap or high market cap, and discuss how market capitalization relates to takeover bids.

⏱TIMESTAMPS⏱
0:00 Introduction
0:30 Definition of market capitalization
0:50 Market capitalization formula
0:59 Calculating market capitalization
2:40 Market cap categories
3:37 Reasons for low market cap versus high market cap
6:41 How market capitalization relates to takeover bids

The definition of market capitalization. Market capitalization (or in short: market cap) is the market value of a company based on the total value of all its publicly traded outstanding shares. This implies that you cannot calculate a #marketcapitalization for companies that are not publicly listed. The formula for calculating #marketcap is simply to take the number of outstanding shares and multiply it by the share price.

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Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and #investing enjoyable and easier to understand. Learn the business and accounting vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market #investing decisions. Philip delivers financetraining in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!