Enterprise Value

Enterprise Value (EV) attemps to measure the value of a company's business rather than the company. It answers the question "what would it cost to buy this business free of its debt and other liablities".

The calculation:

1. the market capitalisation of the company

2. the value of its dept financing (bonds and bank loans, not items such as trade creditors)

3. the value of other liabilities such as a deficit in the co's pension fund

and subtracting the value liquid assets such as cash and investments.