Enterprise Value

Enterprise Value (EV) is the total value of a business, representing the theoretical acquisition price. Formula: Market Capitalization + Net Debt (Debt − Cash) + Minority Interest + Preferred Equity. For private companies, EV is derived from comparable transaction multiples or DCF analysis. EV/EBITDA is the standard valuation multiple in M&A — European industrial companies typically trade at 6-10x EBITDA; technology companies at 10-20x+. Unlike market cap, EV is capital-structure neutral — it captures the value available to all capital providers (equity and debt), making it the appropriate metric for comparing companies with different leverage levels.

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