Small cap company
Encyclopedia
A company whose market capitalization
(share
s x value of each share) is small, under $1 billion.
) borrowing rates and wield reduced power, including a smaller market share
. Being small, they are also less financially stable than larger companies, and are more likely to become bankrupt. However, they do generally have more growth potential
and over time have greater but more volatile expected returns.
For more information, consult Market capitalization
.
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
(share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
s x value of each share) is small, under $1 billion.
Overview
A small cap company typically has under $1 billion under control and are hence considered small companies. Small companies generally are not able to secure the best (primePrime rate
Prime rate or prime lending rate is a term applied in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility, though this is no longer always the case...
) borrowing rates and wield reduced power, including a smaller market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
. Being small, they are also less financially stable than larger companies, and are more likely to become bankrupt. However, they do generally have more growth potential
Growth potential
-Overview:In the case of a company, it is its potential to grow larger in terms of market capitalization, production, sales, revenue, employment, or management.In the case of living creatures, they initially have more growth potential than later on....
and over time have greater but more volatile expected returns.
For more information, consult Market capitalization
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
.