Enterprise Value Calculator
Calculate the total value of a company using this enterprise value calculator. Enterprise Value (EV) measures a company’s total value, often used as a more comprehensive alternative to market capitalization.
Understanding Enterprise Value
Enterprise Value (EV) is a measure of a company’s total value, often used as a more comprehensive alternative to market capitalization. It includes market capitalization plus debt, minority interest, and preferred shares, minus total cash and cash equivalents.
Key Components:
- Market Capitalization: The total market value of a company’s outstanding shares.
- Total Debt: All interest-bearing debt including short-term and long-term debt.
- Cash & Equivalents: Liquid assets that can be easily converted to cash.
- Minority Interest: The portion of subsidiaries not owned by the parent company.
- Preferred Shares: Equity securities that have properties of both debt and equity.
Why Enterprise Value Matters:
Enterprise Value provides a more accurate picture of a company’s valuation because it considers both equity and debt components. It’s particularly useful when comparing companies with different capital structures or when evaluating acquisition targets.