Enterprise value of a share
WHAT IF……you buy a company at 100/- and you got to know the company has a debt of 1000/- ………..
you can’t say the company worth 100/-. It worth 1100/-.
This is the concept of enterprise value of a company. the actual valuation of a company including all the debts with market capitalization excluding cash. cash means the money you get due to the company.
mathematically, enterprise value= market cap + debt – cash
a good company can be found with negative Enterprise value.
you can also search for book value
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