Investment BankingIntermediate

Enterprise Value

EV

The value of a whole business to all its investors, lenders and shareholders.

Detailed explanation

EV is roughly what a buyer would pay to own the operations outright, taking on its debt and keeping its cash.

Formula

EV = Market cap + Total debt + Minority interest + Preference capital − Cash

Example

Market cap ₹1,000 cr + debt ₹200 cr − cash ₹50 cr = EV ₹1,150 cr.

Why it matters

Lets you compare companies regardless of how they are financed.

Key points

  • Pairs with EBITDA, EBIT or revenue multiples.
  • Equity value = EV − Net debt.
  • Ignores capital structure.

Related terms

EV/EBITDANet DebtMarket Capitalisation

More in Investment Banking

Investment BankingMergers & AcquisitionsEquity Capital MarketsDebt Capital MarketsPitch BookDiscounted Cash Flow

Educational content only. Definitions and examples are illustrative and are not investment, tax or legal advice.