What is capitalization& depreciation?
In the capital markets, a company’s total market capitalization is determined by the value of all of its outstanding shares. Deprecation is an accounting term that refers to a non-cash expense that reduces the value of an asset.Calculating Market CapitalizationA company’s market capitalization can be calculated by multiplying its stock price per share by the total number of shares outstanding. For instance, if a company’s stock is worth $4.50/share and there are 50,000,000 outstanding shares, then the market capitalization of the company is $225,000,000.Use of Market CapitalizationThe investment community uses the market capitalization metric in order to determine the size of a company, rather than its total sales or the total value of its assets.Why Do Things DepreciateDepreciation occurs to a non-cash asset due to factors such as usage, wear and tear, and technological obsolescence. With depreciation, the value of the asset reduces over a given period of time.What Can DepreciateAll n
