Share Tweet Share Tweet Now Let us forget about ratios and concentrate on another important aspect. If I tell you the price of two companies — say, company A Rs and company B Rs Is it company A? So, the question is how to measure the size. Market capitalization or market Cap is calculated by multiplying the current stock price by the number of outstanding shares.

Top Companies In India: Top Companies in India by Market Capitalization, Top BSE Companies by Market Capitalization, Top BSE Companies

This number gives you the total value of the company or stated another way, what it would cost to buy the whole company on the open market. A stock trading at Rs 55 withoutstanding shares would have a market cap of Rs 5. Since the per-share price keeps changing and since each company has a different number of outstanding shares, the market capitalization of a company keeps changing everyday.

This is how you should look at these two companies for evaluation purposes. Their per-share prices tell you nothing by themselves.

This is exactly why Reliance industries with a share price of Rs is a bigger company than say, MRF Ltd whose share price is around Rs Having said that, let us look into how the companies are classified according to its market capitalization. But as a general rule, in India, if a company has a market capitalization of more than Rs.

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Try our Beginner's Lessons. Measurement of size- market capitalization by J Victor on August 4th, Share Tweet Share Tweet Now Let us forget about ratios and concentrate on another important aspect.

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