Market capitalization
Financial Dictionary — Finance & Investment
Definition
Value at current market prices of a company's equity capital. It equals the share price times the number of shares outstanding.
Detailed Explanation
Market Capitalization is the market value of a company’s equity, calculated as current share price multiplied by outstanding shares; it is widely used to compare company size and valuation in capital markets.
Common Uses
- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.
- Used to evaluate cash flows, financing costs, and capital structure.
Practical Example
- Example: Finance teams use **Market capitalization** when planning funding needs and managing cash and risk.
Why This Term Matters
- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.