1. What is 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.

2. How Does the Calculator Work?

The calculator uses the Enterprise Value formula:

Where:

• Shares Outstanding — Total number of a company's outstanding shares
• Share Price — Current market price per share
• Net Debt — Total debt minus cash and cash equivalents

Explanation: The formula accounts for both equity value and debt obligations to give a complete picture of a company's valuation.

3. Importance of Enterprise Value

Details: EV is important for comparing companies with different capital structures, assessing takeover value, and calculating valuation multiples like EV/EBITDA.

4. Using the Calculator

Tips: Enter shares outstanding (without commas), current share price in USD, and net debt in USD (can be negative if cash exceeds debt).

5. Frequently Asked Questions (FAQ)

Q1: Why use EV instead of market cap?
A: EV provides a more complete picture as it includes debt and cash, making it better for comparing companies with different capital structures.

Q2: What is a good EV?
A: There's no absolute "good" EV - it depends on company size, industry, and profitability. Analysts compare EV to metrics like EBITDA or revenue.

Q3: Where can I find shares outstanding?
A: This information is available in company financial statements or on financial websites under "key statistics."

Q4: How often should EV be calculated?
A: EV should be recalculated whenever share price changes significantly or when company reports changes in debt/cash positions.

Q5: Does EV include all liabilities?
A: Standard EV calculation includes interest-bearing debt. Some analysts make adjustments for other liabilities like pensions or leases.