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

Share
Reviews Add a review
No reviews yet

More From Corporate Finance Institute®

Browse our top rated business templates. See All
restructuring financial model template preview 1 Restructuring Financial Model Template
234
0
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
TMT Financial Model Template Preview TMT Financial Model Template
355
0
This TMT financial model template is used to value technology, media, and telecom firms. This model provides a template to…
bank financial model template preview 1 Bank Financial Model Template
326
0
This bank financial model template is used to value financial institutions group (FIG) companies. This is a comprehensive model that…
Synthetic Call Chart Option Profit/Loss Graph Maker
922
240
This free Option Profit/Loss Graph Maker allows the user to combine up to ten different types of options as well…
Directional Trading Strategies Template Directional Trading Strategies Template
742
0
The directional trading strategies template allow users to determine the profit when buying options. This template focuses on directional strategies…
HELOC Calculator Template Home Equity Line of Credit (HELOC) Calculator
439
106
This home equity line of credit (HELOC) calculator can calculate the maximum amount of loan a homeowner is eligible to…