What does market capitalization represent?

Market capitalization represents the total market value of a company's outstanding shares. It is calculated by multiplying the current share price by the total number of outstanding shares. This figure provides investors with a clear snapshot of the company's size and overall market value, reflecting how the market views the company's future growth potential and financial health.

Understanding market capitalization is crucial for assessing a company's position relative to others in the industry. For instance, a larger market capitalization typically indicates a more established company with a stable revenue stream, while a smaller market cap might suggest a younger or more volatile company.

The other options do not accurately represent market capitalization. Total revenue refers to the total income generated by a company's sales, debt pertains to financial liabilities that a company must repay, and the number of employees does not have a direct correlation with the company's market value. Each of these aspects is important for various analyses but does not define market capitalization specifically.