Wednesday, December 30th, 2009

Is Enterprise Value on a debt and cash free basis the same as the Equity Value?

debt for equity
csvirtual asked:


I need to calculate the Enterprise Value on a debt and cash free basis.
Enterprise Value = Equity + Debt; now leaving debt and cash out this seems to be the same as the equity value?
What is the difference? Could you give an example?

Thank you!

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One Response to “Is Enterprise Value on a debt and cash free basis the same as the Equity Value?”

gls_merch Says:
December 30th, 2009 at 10:42 pm

Enterprise Value = Value of Equity + Value of Debt – Adjustments for Cash/Working Capital

So if a company had no debt and no excess cash then the enterprise value would equal the equity value.

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