Quick Definition

Enterprise Value (EV) is a measure of a company's total value, often used in the valuation of companies to assess their worth including debt and excluding cash.

Formula

Examples

• 1A company with a market capitalization of $100 million, $20 million in debt, and $10 million in cash would have an EV of $110 million.
• 2In mergers and acquisitions, EV is used to compare companies with different capital structures.
• 3Investors use EV to determine whether a company is undervalued or overvalued by comparing it to its revenue or EBITDA.

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