Basics 101: Understanding Market Cap – A Company’s Price Tag

In by EquityMatesLeave a Comment

 

One of the unique things about the stock market is that you are told the price of your asset every single day. Imagine if that was the same in other asset classes. Every day, a real estate agent calls you to tell you the value of your house or an online portal shows you the latest price someone got for your car.


This price tag is the ‘market cap’ (which when it gets divided by the number of shares – becomes the share price). Market cap (aka market capitalisation) is the value that the market decides a particular company is worth. As well as a company’s market cap, whole markets and indexes are also given measured for their market cap. This then allows for the comparison of the sizes of these different markets.

In this episode you will learn:

  • What the term market cap means and how to calculate it
  • The difference between measures of value (i.e. market cap) and measures of size (i.e. revenue or assets)
  • The different categories (mega cap, large, medium, small, micro etc.)
  • Key ratios that use market cap
  • What market cap tells you about risk
  • Different ways to use market cap in your investing decisions

 

If you are yet to register for our free live shows with Finimize – make sure you get onto it ASAP

We’re really excited for this event, and to meet more of our Equity Mates community. Can’t wait to see you there!

 

Finally, in this episode we introduce our Equity Mates Merch Giveaway. To reach out for your free merch, do something to spread the word about Equity Mates and send it in to contact@equitymates.com. Remember, there is only limited merch available so the bigger you go, the more likely you are to secure some free merch.


Equity Mates Investing Podcast is a part of the Diamantina Media Network – the home of Australia’s favourite podcasts. For more information, visit http://diamantina.com.au/

Leave a Comment