How is market capitalization calculated?

Market capitalization is calculated by multiplying the current share price of a company's stock by the total number of outstanding shares. This calculation gives a measure of the total market value of a company's equity and is a key indicator used by investors to assess the size of a company relative to others in the market.

This method reflects how much investors are willing to pay for a company's stock and is used to compare companies within the same industry or assess growth potential. It provides a straightforward way to evaluate the company's size and market presence.

The other options touch on different aspects of business analysis but do not provide a method for calculating market capitalization. Assessing debt, analyzing employee performance, or reviewing past financial statements involves different evaluations of a company’s health and operations, rather than determining the market value based on stock prices and outstanding shares.