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§01 · EDITORIAL · GLOSSARY · ENTERPRISE-VALUE

Enterprise Value (EV)

Enterprise Value (EV) is the total value of a business including both equity and debt holders — the theoretical takeover price. It is the numerator in EV/EBITDA, EV/Sales, and other capital-structure-neutral valuation multiples. Formula: EV = M

Glossary

Enterprise Value (EV) is the total value of a business including both equity and debt holders — the theoretical takeover price. It is the numerator in EV/EBITDA, EV/Sales, and other capital-structure-neutral valuation multiples.

Formula: EV = Market Capitalisation + Total Debt + Minority Interest + Preferred Equity − Cash & Equivalents.

INR example: Reliance Industries market cap ≈ ₹19 lakh crore, total debt ≈ ₹3.3 lakh crore, cash ≈ ₹2 lakh crore. EV ≈ 19 + 3.3 − 2 = ₹20.3 lakh crore. EV is always ≥ market cap for leveraged companies; for net-cash companies (e.g. TCS, Infosys), EV < market cap.

When to use: When comparing companies with different capital structures — EV-based multiples (EV/EBITDA, EV/Sales) neutralise the debt vs equity mix. P/E is distorted by leverage; EV multiples are not.

SEBI note: EV components come from audited quarterly financials (LODR Regulation 33). Use latest reported numbers, not annual report from 9 months ago.

Related terms: EV/EBITDA, Book Value, DCF (Discounted Cash Flow).

Reviewed · January 2026

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Glossary definitions are written for Indian capital allocators first; where US convention differs, the entry calls that out explicitly. MintByte is an AMFI-registered mutual fund distributor (ARN-314872); SEBI Registered Investment Adviser and Research Analyst registrations are in process. Not investment advice.