What investing term means the total market value of a company’s outstanding shares?

Market capitalization means the total market value of a company’s outstanding shares.

It is calculated by multiplying the current share price by the number of shares outstanding. For example, a company with 10 million shares priced at $20 has a market capitalization of $200 million.

Investors commonly use market capitalization to group companies as large-cap, mid-cap, or small-cap. These labels do not have one universal worldwide cutoff, although large-cap companies are generally more established than small-cap companies.

Market capitalization is not the same as enterprise value. Enterprise value also considers debt and cash, while market capitalization focuses only on the equity value owned by shareholders. It can change every trading day as the share price moves, even when the number of shares stays constant.