Home
Back
Market Cap Formula:
| From: | To: |
Market capitalization (market cap) is the total market value of a company's outstanding shares of stock. It is calculated by multiplying the current market price of one share by the total number of outstanding shares.
The calculator uses the market cap formula:
Where:
Explanation: This formula provides a simple way to determine the total market value of an asset by multiplying its current price by the total available supply.
Details: Market cap is a key metric used to determine the relative size of a company or cryptocurrency. It helps investors compare companies and assess investment risk and potential returns.
Tips: Enter the current price per unit in dollars and the total supply of units. Both values must be positive numbers to calculate an accurate market capitalization.
Q1: What's the difference between market cap and fully diluted market cap?
A: Market cap uses current circulating supply, while fully diluted market cap calculates value using the maximum possible supply if all tokens/coins were in circulation.
Q2: Why is market cap important in investing?
A: Market cap helps categorize companies/assets by size (large-cap, mid-cap, small-cap) which correlates with risk and growth potential.
Q3: Can market cap change over time?
A: Yes, market cap fluctuates with changes in both price and supply (if new units are created or existing ones are burned/destroyed).
Q4: Is a higher market cap always better?
A: Not necessarily. While larger market caps generally indicate more established companies, smaller market caps may offer higher growth potential (with higher risk).
Q5: How does market cap differ from enterprise value?
A: Enterprise value includes debt and cash in its calculation, providing a more comprehensive view of a company's total value than market cap alone.