Enterprise value is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. Think of enterprise value as the theoretical takeover price. In the event of a buyout, an acquirer would have to take on the company’s debt, but would pocket its cash.
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Financial tag cloud
acquisition price capital asset pricing model capital asset pricing model capm CAPM cash flow cash flow analysis cash flow statement Comparable company analysis continuing value cost of capital current assets current market value dcf model DCF Valuation Deal Value debt facility discounted cash flow discounted cash flow analysis Discount Rate EBITDA % estimate value EV/EBITA facebook FCFE FCFF financial definitions Financing Structure Free Cash Flow future performance IRR key ratios LBO model M&A transactions model template model tutorial net working capital PPE Precedent transaction analysis private equity companies return on equity revolving credit facility Small cap premium The Hybrid Method trading comps WACC