FACTOID # 28: Austin, Texas has more people than Alaska.
 
 Home   Encyclopedia   Statistics   States A-Z   Flags   Maps   FAQ   About 
   
 
WHAT'S NEW
 

SEARCH ALL

FACTS & STATISTICS    Advanced view

Search encyclopedia, statistics and forums:

 

 

(* = Graphable)

 

 


Encyclopedia > Market capitalization

Market capitalization, or market cap, is a measurement of corporate or economic size equal to the stock price times the number of shares outstanding of a public company. As owning stock represents owning the company, including all its assets, capitalization represents the public opinion of a company's net worth and is a determining factor in stock valuation. Likewise, the capitalization of stock markets or economic regions may be compared to other economic indicators. The global market capitalization was $51.225 trillion in March 2007 [1], indicating a dominant force in the global economy. Corporate may refer to either A corporation, a type of legal entity, often formed to conduct business Corporate (film), a 2006 Bollywood film starring Bipasha Basu. ... Economics (deriving from the Greek words οίκω [okos], house, and νέμω [nemo], rules hence household management) is the social science that studies the allocation of scarce resources to satisfy unlimited wants. ... In economics wealth of a person or nation is the value of assets owned minus the value of liabilities owed (to foreigners in the case of a nation) at a point in time. ... See stock (disambiguation) for other meanings of the term stock In financial terminology, stock is the capital raised by a corporation, through the issuance and sale of shares. ... In business, the shares outstanding (example) is all company shares less eventual treasury stock (example). ... A public company usually refers to a company which is permitted to offer its securities (stock, bonds, etc. ... This article or section does not adequately cite its references or sources. ... Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way a corporation is directed, administered or controlled. ... In business and accounting an asset is anything owned which can produce future economic benefit, whether in possession or by right to take possession, by a person or a group acting together, e. ... Net worth (sometimes net assets) is the total assets minus total liabilities of an individual or company. ... It has been suggested that this article or section be merged into Fundamental analysis. ... A stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded privately. ... Circulation in macroeconomics Macroeconomics is a branch of Economics that deals with the performance, structure, and behavior of the economy as a whole. ... An economic indicator (or business indicator) is a statistic about the economy. ... The world economy can be represented various ways, and broken down in various ways. ...

Contents

Valuation

Main article: Business valuation
Stock market capitalisation in 2005
Stock market capitalisation in 2005

Market capitalization represents the public consensus on the value of a company. A corporation, including all of its assets, may be freely bought and sold through purchases and sales of stock, which will determine the price of the company's shares. Its market capitalization is this share price multiplied by the number of shares in issue, providing a total value for the company's shares and thus for the company as a whole. Business valuation is a process applied by qualified valuation experts to determine the fair market value of an owner’s interest in a business. ... Image File history File links Size of this preview: 800 × 351 pixelsFull resolution (1425 × 625 pixel, file size: 59 KB, MIME type: image/png)This bubble map shows the global distribution of stock market capitalisation of listed companies in 2005 as a percentage of the top market (USA - $16,997... Image File history File links Size of this preview: 800 × 351 pixelsFull resolution (1425 × 625 pixel, file size: 59 KB, MIME type: image/png)This bubble map shows the global distribution of stock market capitalisation of listed companies in 2005 as a percentage of the top market (USA - $16,997... In business and accounting an asset is anything owned, whether in possession or by right to take possession, by a person or a group acting together, e. ...


Many companies have a dominant shareholder, typically a government or a family. Most stockmarket indices (DOW, S&P500, FTSE, DAX, Nikkei, MSCI) adjust for these by working on a "free float" basis, ie the market cap is the value of the publicly tradable part of the company.


Note that market capitalization is a market estimate of a company's value, based on perceived future prospects, economic and monetary conditions, and therefore largely independent of a company's history. Stock prices can also be moved by speculation about changes in expectations about profits or about mergers and acquisitions. Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. ...


It is possible for stock markets to get caught up in an economic bubble, like the "dotcom mania", and excess speculation, like any asset class such as gold or real estate. In such events, it is normal for companies to become valued on past momentum extrapolated into the future plus justified by a convincing story as well as success, until it goes wrong and the world mean-reverts, causing significant losses. Conversely, stock markets will usually be the primary transmission mechanism for most of the pleasant surprises that occur in the world's economy. Currier & Ives print on economic bubbles, 1875. ... Speculation involves the buying, holding, and selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest. ... General Name, Symbol, Number gold, Au, 79 Chemical series transition metals Group, Period, Block 11, 6, d Appearance metallic yellow Standard atomic weight 196. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...


Capitalized value is a synonomous phrase of market capitalization. Synonyms (in ancient Greek, συν (syn) = plus and όνομα (onoma) = name) are different words with similar or identical meanings. ...


Categorization of companies by capitalization

Smaller companies tend to be riskier investments. The order of magnitude of the capitalization may be used as investor's shorthand for the associated risk, and serves as a handy way to classify companies in general: In essence financial risk is any risk associated with money. ... An order of magnitude is the class of scale or magnitude of any amount, where each class contains values of a fixed ratio to the class preceding it. ...

  • Micro-Cap: capitalization below $250 million.
  • Small-Cap: capitalization between approximately $250 million and $1 billion
  • Mid-Cap: capitalization between approximately $1 billion and $10 billion
  • Large-Cap or blue chip: capitalization over approximately $10 billion

A blue chip stock is the stock of a well-established company having stable earnings and no extensive liabilities. ...

See also

Financial ratios are formed from two or more numbers taken from the financial statements of businesses. ... Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. ... Growth Stocks in finance, are stocks that appreciate in value and yield a high return on equity (ROE). ... Market price is an economic concept with commonplace familiarity; it is the price that a good or service is offered at, or will fetch, in the marketplace; it is of interest mainly in the study of microeconomics. ... Market trends reflect the general direction of prices or rates in financial markets. ... Technical analysis is the study of past financial market data, primarily through the use of charts, to forecast price trends and make investment decisions. ... What follows is a list of over 250 Wikipedia articles on finance topics. ... The following is a list of companies by the greatest market capitalization. ...

References

  1. ^ Global stock values top $50 trln: industry data (Reuters)

Reuters Group plc (LSE: RTR and NASDAQ: RTRSY); pron. ...

External links

  • How to Value Assets - from the Washington State (U.S.) government web site
  • Accurate Market Cap Database Sorted List - from Yahoo! Finance, updated daily

  Results from FactBites:
 
Capital market - Wikipedia, the free encyclopedia (168 words)
The capital market includes the stock market and the bond market.
The capital markets consist of the primary market, where new issues are distributed to investors, and the secondary market, where existing securities are traded.
The capital market can be contrasted with other financial markets such as the money market which deals in short term liquid assets, and derivatives markets which deals in derivative contracts.
Encyclopedia4U - Capital market - Encyclopedia Article (148 words)
The capital market is the market for long-term loans and equity capital.
The capital market includes the stock market, the bond market, and the primary market.
Securities trading on organized capital markets is monitored by the government; new issues are approved by authorities of financial supervision and monitored by participating banks.
  More results at FactBites »

 
 

COMMENTARY     


Share your thoughts, questions and commentary here
Your name
Your comments

Want to know more?
Search encyclopedia, statistics and forums:

 


Press Releases |  Feeds | Contact
The Wikipedia article included on this page is licensed under the GFDL.
Images may be subject to relevant owners' copyright.
All other elements are (c) copyright NationMaster.com 2003-5. All Rights Reserved.
Usage implies agreement with terms, 1022, m