Enterprise Value Formula
The enterprise value formula calculates the total value of a company, including debt and excluding cash. This metric provides a comprehensive valuation by considering the company’s market capitalization, debt, preferred stock, and minority interest, minus cash and cash equivalents. Enterprise value is widely used in mergers and acquisitions to assess the true value of a company beyond just its equity.
Key Takeaways
- Calculates total company value, including debt and excluding cash.
- Considers market cap, debt, and other financial elements.
- Used in mergers and acquisitions.
- Provides a comprehensive valuation.
