Market capitalization, often referred to as market cap, is a financial metric that represents the total value of a company's outstanding shares of stock. It is calculated by multiplying the current share price by the total number of shares available. For example, if a company has 1 million shares priced at $10 each, its market cap would be $10 million. Investors use market capitalization to assess a company's size and investment potential. Companies are typically categorized into three main groups based on their market cap: large-cap, mid-cap, and small-cap. This classification helps investors make informed decisions about risk and growth opportunities.