Market Capitalisation
Market capitalisation or Market Cap is the total value of a company's shares.
1 min read Learning to Invest
What it means
Market capitalisation or Market Cap is the total value of a company's shares. It's calculated by multiplying the share price by the number of shares in circulation.
Example
A company with 100 million shares trading at £20 each has a market capitalisation of £2 billion.
Why it matters
Market capitalisation gives you a sense of a company's size and is often used to group companies into large-, mid- and small-cap categories.
A company's market capitalisation changes whenever its share price changes.
What does a larger market capitalisation mean?
It usually means the company is worth more overall, but it doesn't necessarily mean it's a better investment.