what is the importance of market cap 
market cap is often used as a baseline for analysis as all other financial metrics must be viewed through this lens for example a company could have had twice as much revenue as any other company in the industry however if the company s market cap is four times as large the argument could be made that the company is underperforming the bottom linemarket cap can be a valuable tool for investors watching stocks and evaluating potential investments market capitalization is a quick and easy method for estimating a company s value by extrapolating what the market thinks it is worth for publicly traded companies in an acquisition the market cap helps determine whether a takeover candidate represents a good value to the acquirer 