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How to calculate Enterprise value

The Enterprise value formula, with plain worked examples you can check yourself.

Enterprise value = Market cap + D − Cash

Worked examples

Market cap = 1000 · D = 50 · Cash = 100Enterprise value = 950
Market cap = 800 · D = 50 · Cash = 150Enterprise value = 700
Market cap = 600 · D = 150 · Cash = 150Enterprise value = 600

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Check the units before you compare results.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Valuation & Deals.

Related terms

Due diligenceMergerAcquisitionGoodwill

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