It depends who you ask.
There's a general consensus that the yardstick is market capitalisation, but as for the figure - take your pick from £50 million, £100 million or £500 million.
Of course, market capitalisation is a moveable feast. If an AIM company is recommended in the Sunday newspapers, and its shares rise 30%, its market cap might leap from one side of the threshold figure to the other. Overnight it could turn from a small cap to a mid cap, even though its sales and earnings are the same.
Some commentators argue that market cap just isn't a very good measure of whether a company is big or small. An internet company might have a £500m market cap, but if it has sales of £193,000 and makes a thumping loss, can it really be described as a large company?
Perhaps a better way of identifying a small cap is to leapfrog the whole question of market cap, and concentrate instead on the features that attach to this sort of company. They are:
That's a pretty negative way of looking at small caps, but has the advantage of being realistic.
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