Market capitalisation
The total market value of a company's shares, found by multiplying the share price by the number of shares outstanding. It is what buyers say the equity is worth, not what the business owns.
Market capitalisation is the market's price tag on the whole of a company's equity. It answers a question the share price on its own cannot, because a company chooses how many pieces to cut its ownership into. Two firms worth exactly the same amount can quote share prices that differ by a factor of a hundred, so comparing share prices across companies tells you nothing. Comparing capitalisations tells you which is bigger.
Size measured this way is what sorts the market into large, mid and small capitalisation buckets, and it is what weights most index funds: in a capitalisation-weighted index, a holding's share of the fund is its share of the total market value, counting in practice only the shares actually free to trade, so the biggest companies move the index most. The bucket boundaries are conventions published by index providers rather than rules set by law, and they are revised as markets grow. Bigger companies also tend to trade with deeper liquidity, which is why size and tradability usually travel together.
The mistake is treating capitalisation as the cost of buying the company. It counts equity only. A firm carrying heavy debt costs far more to acquire than its capitalisation suggests, which is why acquirers work in enterprise value, capitalisation plus debt minus cash. The second mistake is reading a low share price as cheap. Cheap is a question about price against earnings or assets, and that is what the price to earnings ratio is for.