What two figures are multiplied to calculate a public company's market capitalization?

A public company’s market capitalization is calculated by multiplying its share price by its shares outstanding.

For example, a company with 1 billion shares outstanding and a share price of $50 has a market capitalization of $50 billion. The calculation is simple, but both figures can change: share prices move throughout trading, while the number of shares can change through buybacks, new issues, or stock splits.

Market capitalization measures the market value of a company’s equity. It is not the same as enterprise value, which also considers debt, cash, and other claims on the business.

Market-cap rankings therefore compare equity values rather than sales or profits. A company with lower revenue can still have a higher market capitalization if investors expect faster growth or stronger future profitability.