The whole company, not one share
A single share price tells you the price of one unit. Market capitalisation, usually shortened to market cap, scales that price across all shares currently outstanding. If a company has 100 million shares priced at £5, its market cap is £500 million.
Now compare a company with only two million shares priced at £50. Its shares cost ten times as much individually, but its market cap is £100 million. The lower-priced share belongs to the larger company in this example. This is why comparing share prices alone is rarely useful.
What market cap helps you see
Market cap is a convenient measure of the equity market's current valuation of a company. It helps group companies into broad size bands and explains why the largest businesses have more influence in market-cap-weighted indices.
Size can shape how a company behaves. Smaller companies may have more room to grow but can be less established and less liquid. Larger companies may be more diversified, yet their scale can make rapid growth harder. These are broad tendencies, not rules about any individual business.
What it leaves out
Market cap values the shareholders' portion. It does not subtract cash or add debt, so it is not the same as the cost of buying the entire operating business. Analysts often use enterprise value when they want a measure that also accounts for debt and cash.
The number also changes whenever the share price changes. A rising market cap does not mean the company received new cash, unless it actually issued shares. It means the market is currently placing a higher price on the existing equity.