What formula calculates a public company’s market capitalization?

A public company’s market capitalization equals its share price multiplied by its shares outstanding.

For example, a company with 10 billion outstanding shares priced at $20 per share has a market capitalization of $200 billion. This calculation represents the market value of the company’s equity.

Market capitalization is widely used to compare companies of different sizes, including the world’s richest companies by market value. It is different from enterprise value, which also considers debt, cash, and other claims on the business.

Market capitalization can change rapidly because share prices move during trading. It can also change after a stock split, share issuance, or share buyback. A stock split usually changes the quoted share price and share count together, leaving the company’s total market value broadly unchanged at the moment of the split.