What is Enterprise Value?

Modified on Mon, 18 Jun 2018 at 11:15 AM

What is the 'Enterprise Value (EV)'

The Enterprise Value, or EV for short, is a measure of a company's total value, often used as a more comprehensive alternative to equity market capitalization. Enterprise value is calculated as the market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents.

EV = market value of common stock + market value of preferred equity + market value of debt + minority interest - cash and investments.

Often times, the minority interest and preferred equity is effectively zero, although this need not be the case.


Source : Investopedia


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