What Is Market Cap? Here’s a Comprehensive Explanation.

The valuation of companies is a critical component of investment analysis and a vital determinant of a business’s financial well-being. Investors must thoroughly understand a company’s value to make informed investment decisions in the dynamic and ever-changing stock market.

One of the most widely adopted metrics for evaluating the value of a company and its growth potential is market capitalization, often called “market cap.”

Below, you’ll learn how to calculate market cap, understand its use in business and learn a comprehensive and intellectually rigorous explanation of its significance in valuing companies.

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