Enterprise Value - EV

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Dictionary Says

Definition of 'Enterprise Value - EV'

A measure of a company's value, often used as an alternative to straightforward market capitalization. Enterprise value is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.

Investopedia Says

Investopedia explains 'Enterprise Value - EV'

Think of enterprise value as the theoretical takeover price. In the event of a buyout, an acquirer would have to take on the company's debt, but would pocket its cash. EV differs significantly from simple market capitalization in several ways, and many consider it to be a more accurate representation of a firm's value. The value of a firm's debt, for example, would need to be paid by the buyer when taking over a company, thus EV provides a much more accurate takeover valuation because it includes debt in its value calculation.

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Related Definitions

  1. Cash And Cash Equivalents - CCE

    An item on the ...

  2. EBIT/EV Multiple

    A financial ...

  3. Enterprise Multiple

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  4. Market Capitalization

    The total dollar ...

  5. Preferred Stock

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  6. EBITDA/EV Multiple

    A financial ...

  7. Enterprise-Value-To-Sales - EV/Sales

    A valuation ...

  8. Total Enterprise Value - TEV

    A valuation ...

  9. Equal Weight

    A type of ...

  10. Debt-Adjusted Cash Flow - DACF

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Articles Of Interest

  1. Using Enterprise Value To Compare Companies

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  2. Value Investing Using The Enterprise Multiple

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    The value of stocks that trade at less than cash per share can be deceiving.

  4. Investment Valuation Ratios: Enterprise Value Multiple

    This measurement allows investors to assess a company on the same basis as that of an acquirer. For more information, see this section.

  5. Relative Valuation Of Stocks Can Be A Trap

    This method of valuing a company can make it look like a bargain when it is not.

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  8. Spotting Profitability With ROCE

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  9. Analyze Cash Flow The Easy Way

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  10. Digging Into Book Value

    This calculation will serve up your portion of the shareholder pie.
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