Valuation Metrics

Market Capitalisation

Market capitalisation is the total market value of a company's outstanding shares, calculated by multiplying its share price by the number of shares on issue.

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Market capitalisation — often shortened to "market cap" — is the single most widely used measure of a company's size in the equity markets. It is calculated by multiplying the current share price by the total number of ordinary shares outstanding.

Market cap is a snapshot in time, not a fixed value. It fluctuates continuously during trading hours as the share price changes. A company whose share price doubles while its share count stays the same will also see its market cap double.

Investors and analysts use market cap to compare companies of different sizes, classify stocks into categories such as large-cap, mid-cap, and small-cap, and understand how much weight a stock carries in an index like the ASPI.

At the CSE, market cap determines tile size in the TaprobaneFi heatmap when the map is in "market cap" sizing mode. Companies with the largest market caps occupy the most screen space, giving an immediate visual sense of which firms dominate the exchange by value.

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On the Colombo Stock Exchange

On the heatmap, you can switch between "market cap", "turnover", and "volume" sizing modes to see which stocks dominate by different measures.

Example

A company with 500 million shares outstanding and a share price of LKR 40 has a market cap of LKR 20 billion.

Related terms

Frequently Asked

What is Market Capitalisation?

Market capitalisation is the total market value of a company's outstanding shares, calculated by multiplying its share price by the number of shares on issue.

How does this apply to the Colombo Stock Exchange?

On the heatmap, you can switch between "market cap", "turnover", and "volume" sizing modes to see which stocks dominate by different measures.

Can you give a practical example?

A company with 500 million shares outstanding and a share price of LKR 40 has a market cap of LKR 20 billion.