Market Capitalization
Total market value of a company's outstanding shares.
Definition
Market capitalization is calculated by multiplying the current stock price by the total number of shares outstanding. It represents the market's consensus on the total equity value of a company and is the primary way to categorize companies by size (mega-cap, large-cap, mid-cap, small-cap, micro-cap).
Formula
Market Cap = Stock Price × Shares Outstanding
Why It Matters
Market cap determines index membership, institutional investment eligibility, and liquidity. Larger financial institutions tend to have more diversified revenue streams and better regulatory standing.