Enterprise value

The enterprise value (which can also be called firm value, or asset value) is the total value of the assets of the business (excluding cash).

When you value a business using unlevered free cash flow in a DCF model you are calculating the firm’s enterprise value.

If you already know the firm’s equity value as well their total debt and cash balances, you can use them to calculate enterprise value.

Enterprise value formula
If equity, debt, and cash are known then you can calculate enterprise value as follows:

EV = (share price x # of shares) + total debt – cash

Where EV equals Enterprise Value. Note: If a business has minority interest, that must be added to the EV as well. Learn more about minority interest in enterprise value calculations.


Calculate the Net Present Value of all Free Cash Flow to the Firm (FCFF) in a DCF Model to arrive at Enterprise Value.

Equity value

The equity value (or net asset value) is the value that remains for the shareholders after any debts have been paid off. When you value a company using levered free cash flow in a DCF model you are determining the company’s equity value. If you know the enterprise value and have the total amount of debt and cash at the firm you can calculate the equity value as shown below.

Equity value formula
If enterprise value, debt, and cash are all known then you can calculate equity value as follows:

Equity value = Enterprise Value – total debt + cash


Equity value = # of shares x share price