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Market Cap P/E(ttm)
Enterprise Value P/B
GKK- (USA)
Not Rated
Top Ranked Predictable Companies
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Definition

Market cap is the short version of market capitalization. It is the total market value to buy the whole company. It is equal to the share price times the number of shares outstanding.

Formula

Market Cap = Share Price x Shares Outstanding

Explanation

Market cap is not the real price you pay for a company. If you buy the company and become its owner, you become the owner of the cash the company has, and you also assume the company’s debt. The real price you pay is the Enterprise Value.

Warren Buffett uses the ratio of total market cap of all public traded companies over GDP to measure if the market is expensive. As of April 2012, the US total market cap is about $14.7 trillion, while the US GDP is about $15 trillion. The market was modestly overvalued.

Related Terms

Shares Outstanding

Financial Dictionary

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