What is Market Capitalisation ?

Manjunath.T

Any one can tel me what is Market capitalisation ?

and how they calculate. i mean on what basis they calculate ?

The problem which i got in an interview is

Share vlue is Rs.213/share

Company has 1000000 Eq.Share

Copany's Net profit for the previous year is 7.53 Crores

What is the Market Capitalisation ?

Any body can healp . .. . . . . . . . .

ramargha

Dear Manjunath.T

I can give u a brief idea.
The market price of share multilpied by no. of shares gives u M.C.
This M.C. fluctuates with sensitive index. If the share price fall , M.C. also falls

Regards
Ram

Manjunath.T

That much idia i had

any way thanks for your answer

rahul_kavishwar

Hi,

Market capitalistion means " current market price into number of shares traded in the market." you will get market cap of that company.

formula = Current market price * no of shares traded in the stock market

i hope you got it

Manjunath.T

Thank u rahul

Regards
Manju

deepto21

manjunath.
Almost all the answers are right and comparable.
But how about the NET profit that the interviewer was asking you?
What treatment would u like to give it?
Share price x No of Share. Fine.
And "Net profit"?

Gangineni Dhananjhay

Hi,

Market Cap is the value market gives to a company. Share capital is normally

1. Authorised share capital

2. Issued Capital

3. Subscribed & fully paid up capital

Normally Company's Share capital is at Face value ( Rs 10/ share)

Any premium collected will go to share premium account.

Market price can be greater than or less than Issue price.

Company's shares are valued more then Market Capitalisation will be several times the issued capital.

Market Cap is an important factor in analysis and valuation of companies.
It is used to compare various companies in the same industry, Classify companies as Large Cap, Mid cap, Small cap.

This is also used in construction of stockmarket indexes like SENSEX, NIFTY etc.

Market Cap is a good estimator of the stability of the company as it reflects a consensus view of all market participants regarding its shareprice and therefore its value. Value creation is the central theme of all corporate finance and shareholders.

Pl feel free to comment and express any questions.

Thanks for the opportunity to participate

Gangineni Dhananjhay
09391319721

Anand Kumar

To find out is it company size, that is it mid size, large or small company usually compare the market cap.[/quote]

assudani1984

market capitalisation means at the present rate equity is available.
suppose compny has issued the equity share worth rs. 10
but the current price of the share is 50 rs. than it is know as market capitalization.

master01

To calculate the market cap, all you simply have to do is take the total number of outstanding shares, then multiply that number by the current share price. Let’s look at Exxon Mobil (XOM) for example:

Total Shares = 5.63 Billion
Today’s Close = 79.82 Billion

Market Cap = $449.63 Billion (5.63 x 79.82)