What is Market Cap?

Market cap or also used as capitalization or market capitalization. Capitalization means a process which helps to evaluate the value of a property based on the rate of return on investment. It can also mean the company’s total debt, stock and long retained earnings. And capitalization is calculated taking in consideration the firm’s outstanding shares and multiplying it by the value of each share. Every time a company is either overcapitalized or undercapitalized then those information might show a negative light on the company it self. For example if a firm has 100.000 shares and each share is worth $25 then the capitalization equals $2.500.000.