Market Cap Calculator

How it works

Market cap = share price × shares outstanding · share price = market cap ÷ shares · shares = market cap ÷ share price Diluted shares (treasury stock method) = basic shares + options × (1 − exercise price ÷ share price, if in the money) + RSUs + convertible shares Free-float market cap = market cap × (1 − closely held %) Enterprise value = market cap + debt + preferred stock + minority interest − cash · P/E = market cap ÷ net income · P/S = market cap ÷ revenue

Market capitalization is the total value the stock market puts on a company’s shares: the share price times the number of shares outstanding. It is the standard measure of company size and says far more than the share price alone, because a $10 stock with billions of shares can be worth much more than a $500 stock with a few million. You can also work backwards: enter a market cap and the share count to get the price per share it implies, or the price to get the share count. Companies are grouped into mega-, large-, mid-, small- and micro-cap bands, which tend to differ in risk, growth and stability. Options, restricted stock units and convertible securities can add shares, so the fully diluted market cap uses the treasury stock method: in-the-money options are assumed exercised and the cash they bring in buys back shares at today’s price. Index providers weight companies by free float, the shares that actually trade, so you can leave out stakes held by insiders or governments. Market cap is the value of the equity only. Enterprise value adds debt, preferred stock and minority interest and subtracts cash, which is closer to what it would cost to buy the whole business. With net income, revenue or EBITDA, the calculator adds the P/E, price-to-sales and EV/EBITDA multiples. The table shows how the market cap and size band change if the share price moves.

Worked example

A stock trading at $150 with 5,000,000,000 shares outstanding has a market cap of 150 × 5,000,000,000 = $750,000,000,000, or $750B — comfortably a mega-cap company. If it also has 100 million options with an average exercise price of $90, exercising them raises $9 billion, which buys back 60 million shares at $150, so they add 40 million net shares. With 50 million RSUs, the fully diluted count is 5.09 billion shares and the diluted market cap is $763.5B. Adding $100B of debt and subtracting $60B of cash gives an enterprise value of $803.5B. Working backwards, a $750B company with 5 billion shares implies a share price of $150.

Sources: Wall Street Prep — Market capitalization (diluted shares, treasury stock method, size bands) · FINRA — Market cap explained

Frequently asked questions