FUNDAMENTAL ANALYSIS TOOLS

Market Value of Equity: Definition and How to Calculate

By JAMES CHEN Updated March 11, 2020

Reviewed by GORDON SCOTT

What is Market Value Of Equity?

Market value of equity is the total dollar value of a company's equity and is also known as market
capitalization. This measure of a company's value is calculated by multiplying the current stock price by
the total number of outstanding shares. A company's market value of equity is therefore always
changing as these two input variables change. It is used to measure a company's size and helps investors
diversify their investments across companies of different sizes and different levels of risk.

Investors looking to calculate market value of equity can find the total number of shares outstanding by
looking to the equity section of a company's balance sheet.