◈ GLOSSARY · INVESTING
Market Capitalization.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
Market cap is the share price multiplied by total shares outstanding — the price tag the public market puts on the entire equity of a company. It's how the industry sorts companies into large-cap, mid-cap, and small-cap buckets. It is not the same as enterprise value, which also includes debt and subtracts cash.
◈ IN PRACTICE
Example
A company has 400 million shares outstanding at $50 each. Market cap is $20 billion — solidly large-cap. If it also has $5 billion of debt and $1 billion of cash, enterprise value is $24 billion.
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