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Enterprise Value

200282932-001Enterprise value is the most accurate and correct measure of the real market value of the business.It is used by the analysts and investors to measure the correct market price of the company.This measure give them a good idea about the current situation and market value of the company.It can be calculated by the following formula:

Enterprise Value =  Market Capitalization + debt + Preferred shares – Cash and Cash Equivalents.

 

Financial experts give  more importance  to this measure than the market capitalization, as it provides more detailed overview of the market value of the company,as compared to the simple market capitalization.

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About Emaad Qureshi