Overview

Enterprise value, also referred to as firm value, is the total value of assets of acompany excluding cash. Financial analysts can calculate a firm's EV using the DCF analysis approach, or they can take the market capitalization, add back total debt and subtract cash to arrive at the EV. The formula for the second approach to calculating EV is as follows:

EV = (Share Price x Number of Shares Outstanding) + Total Debt - Cash + Minority Interest

Equity value is the amount left for shareholders after a company fulfills its debt obligations. There are two types of equity value:

Book Value of Equity = Enterprise Value - Total Debt + Cash - Minority Interest

Market Value of Equity (Market Capitalization) = Number of Shares Outstanding x Share Price

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