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Fundamental Analysis

Market Capitalization

Definition

The total market value of a company's outstanding shares (share price × shares outstanding).

Understanding Market Capitalization

Market Capitalization is an important concept in stock market trading. Understanding this term will help you make better trading decisions and communicate effectively with other traders and financial professionals.

Key Points

  • Basic Definition: The total market value of a company's outstanding shares (share price × shares outstanding).
  • Category: This term is commonly used in Fundamental Analysis
  • Relevance: Essential knowledge for traders operating in Indian stock markets

Practical Example

When trading on NSE or BSE, you'll encounter market capitalization regularly. For example, understanding this concept helps you analyze market conditions, make informed decisions, and manage your trading positions effectively.

Related Concepts

To fully understand market capitalization, you should also be familiar with related trading concepts. Check out the related terms in the sidebar for a comprehensive understanding of this topic.

Related Terms

  • P/E RatioPrice-to-Earnings ratio - stock price divided by earnings per share.
  • P/B RatioPrice-to-Book ratio - stock price divided by book value per share.
  • EPSEarnings Per Share - company's profit divided by outstanding shares.
  • ROEReturn on Equity - net income divided by shareholder equity, measuring profitability.
  • ROCEReturn on Capital Employed - measures how efficiently a company uses its capital.
  • Debt to Equity RatioTotal debt divided by shareholder equity, measuring financial leverage.

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