Definition
EV is the total value of a company, including its market capitalization, debt, and excluding cash. It represents the theoretical cost to acquire the entire business. EV=Market Capitalization+Debt?Cash
Related Services
Mergers & acquisitions (M&A) advisory, corporate finance, and business valuation services rely on EV to assess a company�s total value.
Problem and Application
EV provides a comprehensive valuation, especially useful for comparing companies with different capital structures. However, it can be skewed by non-operational factors like large cash reserves or significant debt.
Conclusion
Enterprise Value offers a more holistic view of a company�s value than market capitalization alone, especially for acquisitions and M&A transactions.
