#markets

2 public notes

Market capitalisation is a price multiplied by a share count

Market capitalisation measures a company's equity value at the current share price. If it has 10 lakh outstanding shares trading at ₹50 each, its market capitalisation is ₹5 crore. This is not the cash the company holds, its annual revenue or the value of all its assets.

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liquidity

Liquidity is about turning value into usable cash

Liquidity describes how easily an asset can become cash without a substantial loss in price. A property may be valuable yet take months to sell. Money already available in a transaction account can be much easier to use for a bill due tomorrow, despite being a smaller asset.

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