{"id":4064,"date":"2023-03-08T14:58:09","date_gmt":"2023-03-08T14:58:09","guid":{"rendered":"https:\/\/fisdomdevel.wpengine.com\/glossary\/enterprise-value\/"},"modified":"2023-03-08T14:58:09","modified_gmt":"2023-03-08T14:58:09","slug":"enterprise-value","status":"publish","type":"post","link":"https:\/\/www.fisdom.com\/glossary\/enterprise-value\/","title":{"rendered":"Enterprise Value"},"content":{"rendered":"<p>\nEnterprise Value or EV refers to the total value of a company including common shareholders, preferred shareholders and its lenders. EV is the corporate valuation of the company and is calculated by using market capitalization and company\u2019s total debt. The market cap used for determining EV includes preference shares, common stock and minority shareholder interest. Total debt comprises both short-term and long-term liabilities of the company.<\/p>\n<h2>Calculation of Enterprise Value<\/h2>\n<p>EV is computed using the following formula<br \/>\nEV = Market Capitalization + Market Value of Debt \u2013 Cash and Equivalents.<\/p>\n<p>Market Cap in EV is a detailed brekup, as:<br \/>\nEV = (Common Shares + Preferred Shares + Market Value of Debt + Minority Interest) \u2013 Cash and Equivalents<\/p>\n<h2>Benefits of Enterprise Value<\/h2>\n<p>Some benefits of using Enterprise Value are:<br \/>\na) It is considered as a more accurate measure of a company&#8217;s valuation.<br \/>\nb) It includes the entire market value instead of only the equity value.<br \/>\nc) It is specifically used during merger &amp; acquisition deals.<br \/>\nd) It is the \u2018minimum value\u2019 that a company would pay for buying a company.<\/p>\n<h2><\/h2>\n<h2><\/h2>\n<h2><\/h2>\n","protected":false},"excerpt":{"rendered":"<p>Enterprise Value or EV refers to the total value of a company including common shareholders, preferred shareholders and its lenders. EV is the corporate valuation of the company and is calculated by using market capitalization and company\u2019s total debt. The market cap used for determining EV includes preference shares, common stock and minority shareholder interest. [&hellip;]<\/p>\n","protected":false},"author":67,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[11],"tags":[],"class_list":["post-4064","post","type-post","status-publish","format-standard","hentry","category-stocks"],"_links":{"self":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4064","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/comments?post=4064"}],"version-history":[{"count":0,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/posts\/4064\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/media?parent=4064"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/categories?post=4064"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fisdom.com\/glossary\/wp-json\/wp\/v2\/tags?post=4064"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}