4 ms·
Can someone be so kind to explain how is the market worth of a company calculated? Is it based on (1) the number of users (2) how much capital gets invested in
by seesawtron 6y ago
Can someone be so kind to explain how is the market worth of a company calculated? Is it based on (1) the number of users (2) how much capital gets invested in it with purchase of shares? ..?
I just find it hard to grasp the idea that an app can "be worth" more than 7 largest airlines combined; because I do not clearly understand how the worth is being calculated.
- thoughtstheseus 6y agoWorth, as from the article is market capitalization. Market Capitalization is shares outstanding times price per share. Price per share is the price at which shares of that company trade at. You could also look at enterprise value which is market cap + net debt for a better view of size. In the investment markets people frequently joke about how poor airlines are for an investment. Many of them don’t even own their own planes because they do not make enough money to use the depreciation.