Market Capitalization

The market capitalization is the total market value of the company. This can be calculated as:

Number of shares outstanding x current share price

On its own, the market capitalization may not have much of a significance, unless it is compared to figures in the balance sheet. For example, a company has a market capitalization of 100 million, no debt, 80 million of cash on its balance sheet and 10 million in average net income for the last 10 years. This company is thus considered undervalued because an investor who buys the entire company is paying 100 million – 80 = 20 million for 10 million of average annual income.

Read: Share Split



Minority Interest

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  • Current Assets The current assets are short term assets that can be converted to cash readily within 12 months. The current assets consists of cash, marketable securities, accounts receivables and inventory. If...
  • Price To Book Value The price to book value can be calculated as: Last transacted price  divided by book value per share If the price to book value is low compared to the peers...
  • Minority interest Minority interest refers to the part of the subsidiary that is not owned by the parent company. This is reflected in the balance sheet as a separate item. This happens...
  • The Balance Sheet The Balance Sheet The balance sheet is a record of the company’s assets and liabilities on a particular date. In a sense, it is a snapshot of the financial health...