Enterprise value: Building Enterprise Value from Its Components
Enterprise value adds financing claims to equity market value and subtracts cash. It helps compare operating businesses with different financing structures.
Use the Enterprise value Calculator to enter your own figures and compare the result with the worked example below.
Enterprise value formula
EV = Market cap + Debt + Preferred equity + Minority interest − Cash
Worked example
| Item | Example value |
|---|---|
| Market capitalization | 1000000 USD |
| Debt | 200000 USD |
| Preferred equity | 50000 USD |
| Minority interest | 10000 USD |
| Cash | 100000 USD |
| Enterprise value | 1,160,000 USD |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Use consistent valuation dates and check which debt and cash items belong in the analysis. It is not simply the amount a buyer must pay at closing.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Introduction to investing. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.