You still often hear the phrase “market cap” but you have not learned much information about them. What is market cap? Are market cap and market cap related? Here, Fastloans.ph will provide you with information about what is Market cap and list for you the top 5 market cap companies in the world, let’s find out.
Table of Contents
What is market cap?
Market cap (market capitalization) is the total value of the number of shares that a company is listed, excluding shares held by a company.
In the field of electronic money, the market cap is the market cap of the cryptocurrency market. The capitalization value of each coin will be calculated = Coin price multiplied by the number of coins in circulation (circulating supply). To capture market capitalization as well as coin price fluctuations, crypto investors often use the website Coinmarketcap.com
This term is one of the important indicators to help investors refer to before making a decision. The size and growth rate of a company’s market capitalization will reflect the economic and governance efficiency of that business. Especially, this indicator will be publicly announced annually on the portal. Therefore, in terms of transparency, this indicator is reliable with investors.
The formula for determining Market cap
Market capitalization = Number of shares x Price per share at the present time
Example: A company with 10 million shares sold for $ 100 each will have a market cap of $ 1 billion.
Note:
- When calculating the market capitalization, people only take into account common stocks, not preferred stocks.
- Market capitalization should not be confused with the enterprise’s total equity capital, because the total value of equity also includes unrealized stock options, preference shares, and bonds …
In the field of Crypto, Market Cap is the capitalization of the cryptocurrency market. Market capitalization is a way to rank a coin’s relative size in the cryptocurrency market. Similar to the formula for calculating the capitalization of a business, the Market Cap of a coin is calculated by:
Market Cap = Price (1 Token/coin) × Amount of coins in circulation
Factors affecting the Company’s Market cap
According to statistics, there are 2 influencing factors that can change the Market cap, including:
- Stock price variation: Any change in stock price will have an impact on the company’s market capitalization. When there is some negative effect that causes the stock price to plummet, it reduces the company’s market capitalization and vice versa, when something causes the stock price to rise, of course the market capitalization. That company’s field also increased.
- Company issues or repurchases shares: A large change in the number of shares circulating in the market can affect the market capitalization.
See also: What is liquidity? Basic information about liquidity you should know
Size of the Market cap
Depending on the size of the Market cap, companies are classified into different groups, namely:
Mega Cap
These are large companies with a market capitalization of $ 200 billion or more. Big / Large Cap
This includes large companies valued between $ 10 billion and $ 200 billion
Mid Cap
These are companies that range from $ 2 billion to $ 10 billion
Small Cap
This includes companies with a market cap between $ 300 million and $ 2 billion. These are usually either newcomers or companies in emerging industries.
Micro Cap
These are companies with a market capitalization between 50 million and 300 million dollars.
Nano Cap
These are companies with a market capitalization of less than $ 50 million.
Top 5 companies with top market cap in the world
Companies with the highest market capitalization in the world must include:
Amazon
With a market capitalization of $ 797 billion, Amazon e-commerce corporation is considered the largest public enterprise in the world by market capitalization. Amazon operates mainly in consumer retail and cloud computing.
Microsoft
Microsoft software company was founded on April 4, 1975 with a current capitalization of $ 783 billion, currently the corporation has the second largest market cap in the world after Amazon. Microsoft operates mainly in the manufacturing and trading of software copyrights and supports a wide range of computer-related products and services.
Alphabet
Alphabet was founded in 2015, is the parent company of the Google search engine. With a market cap of about $ 748 billion, Alphabet is ranked third in the ranking of market capitalization.
Apple
Apple was founded on April 1, 1976 with a market capitalization of $ 702 billion and is currently ranked 4th in the rankings after Alphabet. Apple is the world’s leading technology corporation, operating in the field of manufacturing and selling computers, phones and smart devices.
Berkshire Hathaway
Berkshire Hathaway was founded in 1839 with a total market capitalization of about $ 494 billion, ranking 5th in the ranking. Berkshire Hathaway is a monopoly in a wide range of industries: insurance and reinsurance, utilities and energy, rail transport, finance, manufacturing and retail.
Above, Fastloans.ph has provided you with information about what is Market cap and listed for you the top 5 market cap companies in the world. Hope these shares will help you to have more complete knowledge about Market cap.
See also: What is Price Elasticity of Demand? Price Elasticity of Demand Formula
