Valuation plays a very important role in knowing whether the company is worth investing at certain levels or not.
Stock market tells you the price of everything but not the value of anything. What is the value of any company in market can be known by its market capital which is
MCap = Current Share price x No. of shares issued by the company
This market capital roughly tells you how much you have to spend if you want to buy the whole company now itself. If you wish to buy the whole company, you have to buy all its shares at the price offered in the market or at the current market price. [Read more…]