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Home Resources Glossary Enterprise Value (EV)

Glossary

Enterprise Value (EV)

A measurement of a company’s total value, calculated as equity minus cash plus outstanding debt.

See Also

Book value, fair market value, market value.

Tips

Enterprise value is one of the many terms used to describe the value of a company. Enterprise value attempts to describe the value of a company more accurately by accounting for a variety of assets and liabilities that are not included in the other definitions of value. Market capitalization is the total value of all the outstanding shares of a company (i.e., equity). Enterprise value also includes the value of debt the company has assumed.

Related Resources

Business Valuation Standards of Value & Fair Market Value

Related Terms

Earnout

An agreement whereby the buyer pays part of the purchase price to the seller based on the future performance of the company, or the fulfillment of some other specified event....

EBIT

A measurement of the operating profit of a company. It stands for earnings before interest and taxes. See Also EBITDA, net income, SDE. Tips E = Earnings, B = Before,...

EBITDA

A measurement of the cash flow of a company which includes earnings before interest, taxes, depreciation, and amortization. See Also Cash flow, EBIT, net income, SDE. Tips EBITDA stands for...

Employee Stock Ownership Plan (ESOP)

An equity plan established by a company that permits the grant of options on stock of the company as long-term incentive compensation for employees. See Also Management Buyout (MBO). Tips...

Entity

A separate, legal entity authorized to act separately from its owners, such as a C Corporation, S Corporation, or LLC. See Also C Corporation, S Corporation, Limited Liability Company (LLC)....

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