Revenue To Market Cap

What is the difference between market capitalization and revenue.

Revenue to market cap. Small cap stocks are usually under 1 billion in market cap mid caps are between 1 billion and 8 billion while large caps are more than 8 billion. Market capitalization and revenue are two metrics used for value estimation. Market capitalization formula 20 000 000 x 12 12 million. Market capitalization is essentially the amount of money it would take to purchase an entire company based solely on its stock price.

Market capitalization reflects the total value of a company based on its stock price. Market capitalization s calculation is a direct outgrowth of its stock market performance while revenue s calculation is not tied to market performance. The price sales ratio takes the current market capitalization of a company and divides it by the past 12 months trailing revenue. Based on the above given information and the formula of market cap we will be able to calculate that abc company s market capitalization.

According to a summary table on the fidelity. To calculate a company s market cap multiply the number of shares outstanding by the current price of a single share. Market capitalization or market cap is a simple metric based on stock price. There are many methods used to estimate a company s worth and the accurate appraisal of a company s value affects many financial decisions.

Revenue cap regulation is a form of. A company abc has a total of 20 000 000 shares outstanding and lets us suppose the current share price is 12. Revenue is the total amount of money a corporation brings in during a given time frame quarterly yearly and doesn t really have a correlation to the stocks market cap. Market cap is the of the total amount of stock issued x the stocks price.

Market capitalization and revenue are two of the simplest metrics used for value estimation but they are often frequently misunderstood. The market capitalization is the current market value of a company. Revenue cap regulation seeks to limit the amount of total revenue that can be earned by a firm operating in an industry with no or few other competitors. As a stocks price goes up its market cap moves up.

Low cap stocks have a market cap of less than 1 billion mid cap stocks have a market cap of between 1 billion and 8 billion and large cap stocks have a market cap of 8 billion and larger according to fidelity. Revenue is the amount of money a company earns as a result of sales.