MARKET CAPITALISATION Meaning and
Definition
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Market capitalization refers to the total value of a publicly traded company's outstanding shares of stock. It is a financial metric used by investors, analysts, and researchers to assess the size and value of a company. Market capitalization is calculated by multiplying the company's current share price by the total number of its outstanding shares.
Market capitalization is an important measure as it represents the market's consensus on the worth of a company. It indicates the company's size in relation to other companies in the market and can provide insights into its stability, growth potential, and overall value. By comparing market capitalizations of different companies within the same sector or industry, investors can evaluate the relative strength and competitiveness of each company.
Market capitalization is generally classified into three main categories: large-cap, mid-cap, and small-cap. Large-cap companies typically have a market capitalization of $10 billion or more, mid-cap companies range between $2 billion and $10 billion, and small-cap companies have a market capitalization below $2 billion. These classifications help investors create portfolios with varying degrees of risk and return potential.
Market capitalization is a dynamic measure that fluctuates with changes in a company's stock price and the number of outstanding shares. It can provide a quick snapshot of a company's standing in the market, but it should be considered alongside other financial indicators and company-specific factors to gain a comprehensive understanding of its investment potential.
Common Misspellings for MARKET CAPITALISATION
- narket capitalisation
- karket capitalisation
- jarket capitalisation
- mzrket capitalisation
- msrket capitalisation
- mwrket capitalisation
- mqrket capitalisation
- maeket capitalisation
- madket capitalisation
- mafket capitalisation
- matket capitalisation
- ma5ket capitalisation
- ma4ket capitalisation
- marjet capitalisation
- marmet capitalisation
- marlet capitalisation
- maroet capitalisation
- mariet capitalisation
- markwt capitalisation
Etymology of MARKET CAPITALISATION
The term "market capitalisation" is derived from two words: "market" and "capitalisation".
The word "market" traces its roots back to the Latin word "mercatus", meaning a place of trade or commerce. It evolved through Old French and Middle English to refer to a specific place where goods are bought and sold. Over time, "market" has come to refer not just to a physical location but also to the overall activity of buying and selling goods.
The word "capitalisation" comes from the Latin word "capitālis", which means "pertaining to the head" or "principal". In financial terms, "capitalisation" refers to the process of estimating the total value of a company by multiplying the total number of outstanding shares by the price per share. It represents the aggregate value that the market assigns to a company.
