Finance glossary
Enterprise Value
Definition
A company total value: market cap plus debt minus cash.
Enterprise value represents the full takeover cost of a business, adding net debt to market capitalization. Because it accounts for capital structure, it allows fairer comparisons than market cap alone and is the basis for multiples like EV/EBITDA and EV/Sales.
In a sentence
Adding its debt and subtracting cash, analysts pegged the firm's enterprise value at $12 billion.
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