Enterprise Value Calculator
The Enterprise value (EV in short) – a measure of a company’s total value.Enterprise Value equal to Market Capitalization added to debt ,minority interest, preferred shares less than Cash and Cash Equivalents.
Formula us,
Enterprise value = market capitalization + debt + minority interest + preferred shares – cash and cash equivalents
Let us consider,
- Market capitalization – the market value of the whole range of outstanding shares a company has.
- Minority interest – less than 50% of subsidiary’s equity owned by an investor or other company.
- Preferred shares – one of two main types of stock, besides common stock. Preferred stock is firmer but usually less profitable, and the shareholders .
- Debt – it’s simply the amount of debt that needs to be absorbed by the purchaser.
- Cash and cash equivalents – owned by the acquired company.
calculate enterprise value.
Example
- Outstanding shares: 7.5M
- Share price: $16.45 per share
- Total debt: $123.5M
- Cash and cash equivalents: $40M
Calculate Market capitalization
Market Capitalization = Outstanding shares * Share Price
market capitalization = 7.5M * $16.45 = $123.375M
Example for Enterprise Value
Enterprise value = market capitalization + debt + minority interest + preferred shares – cash and cash equivalents
Enterprise Value = $123.375M + $123.5M – $40M
The answer is Enterprise value = $286m