Market capitalization is the approximate market value of a company's outstanding shares. It is calculated by multiplying the current share price by the total number of outstanding shares.
Why investors use it
Market capitalization helps investors compare the relative size of companies. Large-cap, mid-cap, and small-cap labels describe size groups, although the exact classification can change with market values.
Limitations
Market capitalization does not tell you whether a company is cheap or expensive. It does not directly measure debt, cash flow, profitability, or business quality, so it should be considered with other information.
