Enterprise Value (EV)
Also called EV
Enterprise Value is a measure of a company’s total value and is the what the total value of the business is in a valuation context.
Formula
Enterprise Value = Equity Value + Net Debt + Preferred Stock + Minority Interest
Example
In the room
The EV-to-equity-value bridge is one of the most reliably asked technical questions in banking. You need to be able to walk it in both directions without pausing, and explain why EV is the number used in valuation multiples. It's the value of the business regardless of how it's financed.