Market capitalisation is an important measure of the size and importance of a listed company.
It indicates how much the company is worth in total and is calculated by multiplying the current share price by the number of shares issued. Market capitalisation thus reflects the current stock market value of the company.
Since the share price is subject to constant fluctuations, the market capitalisation of a company is also subject to constant change. It can fluctuate from day to day or even from hour to hour. Especially in volatile markets, these fluctuations can be very strong.
Market capitalisation is an important factor in the valuation of companies. The higher the market capitalisation, the larger the company is usually valued. This has an impact on the company's image and can also influence its credit rating.
Market capitalisation is also an important indicator for the composition of share indices, as these are often weighted according to the market capitalisation of the companies included. Companies with a higher market capitalisation thus have a higher weight in the index and influence its performance more strongly.
