What is Enterprise Value?
Enterprise Value (EV) is a comprehensive measure of a company's total value, representing the theoretical takeover price required to acquire the entire business. It takes into account not only the market value of a company's equity (its market capitalization) but also its debt, cash, and other financial assets or liabilities. Enterprise Value is often used by investors, analysts, and acquirers to assess a company's worth in its entirety.
Enterprise Value provides a more comprehensive picture of a company's value compared to market capitalization alone because it considers both equity and debt. It is commonly used in financial analysis, particularly in valuation metrics such as the EV/EBITDA (Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortization) ratio, which helps assess a company's valuation relative to its earnings.
How to Calculate Enterprise Value?
Enterprise Value calculator uses Enterprise Value = Market Capitalization+Total Debt of Company-Cash and Cash Equivalents to calculate the Enterprise Value, The Enterprise Value formula is defined as a comprehensive measure of a company's total value, representing the theoretical takeover price required to acquire the entire business. Enterprise Value is denoted by EV symbol.
How to calculate Enterprise Value using this online calculator? To use this online calculator for Enterprise Value, enter Market Capitalization (MC), Total Debt of Company (TDC) & Cash and Cash Equivalents (C) and hit the calculate button. Here is how the Enterprise Value calculation can be explained with given input values -> 950999 = 931000+12000000-11980001.