Enterprise Value

A popular calculation used in valuation multiples for financial analysis. The enterprise value adds debt to market capitalization and subtracts cash and cash equivalents.

By using this figure it is possible to understand what would be a fair market value to buy the entire company outright and then compare different companies.

Used in conjunction with the deposit value EV/Deposit, or against other financial measurements such as EV/EBIT or EV/EBITDA companies can be evaluated on future potential. In these notes the focus is limited, but most stock analysis websites include the ability to measure other variables against EV.