What is Firm Value

Enterprise Value of a Company

Enterprise Value is a business valuation calculation that measures the worth of a company by comparing its stock price, outstanding debt, and cash and equivalents in the event of a company sale. In other words, it’s a way to measure how much a purchasing company should pay to buy out another company. It is also called the takeover price because it is the amount of money required to purchase 100 percent of a business and thus take it over.