Investing · General financial education

Market capitalisation

Market capitalisation is roughly share price times shares outstanding. It estimates what the market values as the company's equity.

In more detail

Large, mid and small are rough size buckets, not quality grades. Market cap is not the same as revenue, earnings or a 'fair' value. Indices often weight by market cap; that is mechanics, not a Finmon tip.

Background

The figure moves with the share price. This sits next to shares, index funds, and ETFs. Finmon does not tell you to prefer a size, and it does not recommend an index.

An example

100 million shares at €20 give a market cap of €2 billion. If the price doubles, that figure roughly doubles too.

A common misconception

The largest company by market cap is always the best investment.

Market cap measures size at market price. It is not a recommendation.

Source: Investor.gov · Market capitalization. Last reviewed: 2026-11-09. Editorially reviewed on 2026-11-09. Next review 2027-11-09. Version 0.2.0. Finmon explains. It does not advise. Not investment, tax or legal advice.