Enterprise Value (EV) is a comprehensive measure of a company's total value used by investors. It goes beyond just examining market cap (equity value) and takes into account other important elements like the company's debt and cash reserves. It is calculated as follows:To calculate a company's total debt, check its liabilities and add up everything listed as debt.EV is often used in mergers and acquisitions, valuations, and financial analysis. It can be interpreted as the cost to take over the business.
Learn Enterprise Value (Direct) with interactive examples and practice exercises in our Balance Sheet module.
This interactive learning module helps you understand Enterprise Value (Direct) through hands-on practice and real-world examples.