Market cap is the total dollar market value of a company’s outstanding shares of stock. The full actual name is “market capitalization”. Multiply the total number of a company’s outstanding shares by the current market price of one share to arrive at the Market capitalization value. But, it could be difficult to understand as theory.
Let’s just see a quick example. A company with 1 million outstanding shares selling for $1000 each would have a market capitalization of $1 billion. Subsequently, market capitalization divides stocks into large cap, medium cap and small cap for normal investors. In conclusion, Market capitalization helps anyone estimate a company’s size compared to using revenue or profits.