Plain-English definitions, reviewed by an independent investor

Enterprise Value

Enterprise value is the total takeover price: market cap plus debt minus cash.

EV = Market Cap + Debt − Cash

Why it matters

It is what a buyer actually pays, making it the true firm value.

A company with lots of cash is cheaper than its market cap suggests; debt adds cost.

Definitions reviewed by the Investing Glossary editorial team.

A buyer gets the cash, lowering the effective price.

Market cap is equity only; EV adds debt and nets cash.