Comapny Net Worth

what is the meaning of market capitalization? is it the same as net worth of a company?

1 Answer(s)


Market capitalization is the market value of a company at any particular moment in time. It can determined by multiplying the market price of a single share of company stock by the total number of the company's outstanding shares
A company's shareholder equity is calculated by subtracting the company's liabilities from its assets. Networth is not influenced by the market price of the company stock.
Company’s networth is the amount of equity that is available to shareholders after a complete liquidation of all of the company's assets. A company's market capitalization is almost always higher than its shareholder equity, because investors tend to include in the value of the stock certain factors beyond the liquidation value of the company, such as sales, earnings, patents and emerging market trends.