In order to calculate the market capitalization (or market cap or equity value), we need to multiply two things together The first of these is the traded share price and we multiply that by the number of shares and that gets us our market cap A few questions surround the number of shares Do we choose the basic number of shares or the diluted number shares? It's always going to be the diluted number shares This includes the fact that the company will have extra shares existing in the future. Why? The company may have issued some share options, it may have some convertible debt And these will lead to the creation new shares in the future We need to include them when coming up with our market cap Now you might ask, "hang on, if the number shares is going to go up, then that means that the traded share price will go down" Well that traded share price already reflects dilution This dilution (the extra shares that are going to be created in the future), this is publicly available information And priced into the share price already So the share price includes this dilution happening in the future and the number shares also has to include it as well A second question on the number of shares Would I use the number of shares at the period end (the most recent number) Or would I use the average number of shares over the last period We always go with a number at the end (the most recent number of shares) In addition, what kind of shares should I include here? Well if the company has got class A, class B, class C shares, we should include all of them However if the company has preference shares, we don't include them. They are not part of the ordinary equity of the business Lastly, if the company has American depository receipts (ADRs) or global depositary receipts (GDRs). We don't include them either They are copies of shares that already exist and you've already included those shares If you were to also to include the ADRs and GDRs, you'd be double counting those shares