Evaluating Companies Using Market Capitalization

Market Cap Defined:

Market capitalization or market cap is one way to compare two different stocks that have similar market prices. A market cap valuation is an additional method for grouping stocks outside of their sector or industry.

Market Cap or Market Capitalization = Total Outstanding Common Shares x Current Market Price

Market capitalization is not strictly defined, but the following are widely accepted cap sizes:

Mega Cap:Cap Size: $200 Billion Alternate Name: Blue ChipExample: CitiGroup Inc.Large Cap:Cap Size: $10-$200 BillionAlternate Name: Blue ChipExample:Coca Cola Co.Mid Cap:Cap Size: $2-$10 BillionAlternate Name: Growth StockExample: Abercrombie