Financial metrics2 min read
Market capitalisationGerman: Marktkapitalisierung
Market capitalisation is a company’s stock-market value: share price multiplied by the number of outstanding shares.
In plain language
It changes with the stock price and share count. It helps classify firms as small, mid or large caps. It is neither book value nor automatically the price of acquiring the entire business.
Let’s make it concrete
Ten million outstanding shares at €25 each imply a market capitalisation of €250 million.
Simplified example for illustration.Worth understanding
A large market value does not show whether the price is reasonable relative to future earnings.
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For further learning and reference:
Financial education for orientation. No individual investment, tax or legal advice.
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