The indicator is calculated by multiplying the price of one share by the number of shares in circulation and answers the question of how the market values the company as a whole. It is capitalization, not the price of a single security, that characterizes the size of the issuer.
A common misconception is to consider a stock with a low price as cheap. Price by itself means nothing: it depends on how many parts the capital is divided into. After a stock split, the price falls, but the capitalization remains unchanged.
Capitalization forms the basis of most multiples and determines the weight of a company in stock exchange indices. Capitalization is also calculated separately for freely tradable shares: if a large stake is held by the state or principal owner and does not participate in trading, full capitalization overstates the actual market size of the security.
For the Uzbek market, this last point is crucial. Some issuers have only a small portion of capital in free circulation, so a large capitalization company may be difficult to purchase in the required volume.