Enterprise Value
What it would actually cost to acquire a company outright — market cap plus total debt, minus cash on hand — a fuller measure of company value than market cap alone.
What it means
Enterprise value (EV) is a company's market capitalization plus its total debt, minus its cash and cash equivalents. It represents a more complete estimate of what it would actually cost to acquire the entire company than market cap alone: an acquirer buying all the shares (market cap) would also take on the company's existing debt, but would immediately have access to its cash, which effectively offsets part of the purchase price. Two companies with identical market caps can have very different enterprise values if one carries significant debt and the other doesn't, or if one is sitting on a large cash pile and the other isn't — which is exactly the gap enterprise value is designed to capture.
How MarketWall calculates it
MarketWall computes enterprise value from each stock's latest market cap, total debt, and cash position, refreshed as part of the weekly Yahoo Finance fundamentals sync. See the Data Sources & Methodology page for the full sync schedule.
How it's typically used
The gap between a company's enterprise value and its market cap tells its own story: an EV meaningfully above market cap means the company carries more debt than cash, so an acquirer would be taking on real net liabilities beyond the share price. An EV below market cap means the opposite — a company sitting on more cash than debt, effectively meaning part of the market cap is just cash on the balance sheet rather than value from the operating business. That second case comes up often enough with cash-rich, low-debt companies (common among mature, highly profitable tech companies in particular) that it's worth checking directly rather than assuming EV and market cap are roughly interchangeable. Enterprise value's main practical use is as the numerator in valuation ratios like EV/EBITDA and EV/Revenue, which are generally considered more reliable than market-cap-based ratios (like P/E) for comparing companies with meaningfully different capital structures, since EV already accounts for the debt and cash differences that would otherwise distort the comparison. It's also the more relevant number in an actual acquisition context — a buyer negotiating to purchase a company cares about the full cost of the deal, including debt assumed and cash received, not just the market value of the outstanding shares.
Live example right now
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FAQ
Why would enterprise value be lower than market cap?
It happens when a company holds more cash than debt — the cash effectively offsets part of the acquisition cost, so EV (which subtracts cash) comes in below market cap.
What's enterprise value mainly used for?
As the basis for capital-structure-neutral valuation ratios like EV/EBITDA and EV/Revenue, and as a more realistic estimate of a company's total acquisition cost than market cap alone.
Does a bigger enterprise value mean a more valuable company?
Generally it correlates with company size, similar to market cap — but a big gap between EV and market cap specifically reflects debt and cash levels, not necessarily overall business quality.
How is enterprise value different from market cap?
Market cap only reflects the value of outstanding shares. Enterprise value adds total debt and subtracts cash, giving a fuller picture of what it would cost to acquire the whole company, debt included.
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