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Enterprise value

$229,375,000,000

This is arithmetic for general information, not financial advice.

Enterprise Value Calculator

Enterprise value, or EV, is a way to size a whole company. It starts with the market value of its shares, then adds what it owes and removes the cash it holds.

How it works

Enterprise value is the market value of the shares, plus total debt, minus cash and cash equivalents. Debt is added because whoever takes over the whole company also takes on those obligations. Cash is taken off because it could be used against them.

Some analysts also add preferred stock and minority interests. This calculator leaves them out, so add them yourself if a company reports them.

Worked example

With a share price of $150.25, 1,500,000,000 shares, $12,000,000,000.00 of debt and $8,000,000,000.00 of cash, the enterprise value is $229,375,000,000.

Questions

Why subtract cash?

Cash could pay down debt straight away, so the whole company's value is lower by the debt but higher by the cash. Subtracting it shows the value of the business operations on their own.

Where do I find debt and cash?

On the balance sheet in a company's quarterly or annual report. Use the most recent figures you can find.

Is enterprise value the same as market cap?

No. Market cap counts only the shares. Enterprise value adds debt and removes cash, so the two can be quite far apart for a company with a lot of either.

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