Definition
Enterprise value (EV) represents the value of the operating business available to all capital providers (debt and equity). DCF models that discount unlevered free cash flows typically produce EV.
How to use it
- EV is often bridged to equity value by adjusting for net debt and other claims.
- EV multiples (EV/Revenue, EV/EBITDA) are not the same as equity multiples (P/E).
Why this matters
This term matters because cash timing and risk are usually the difference between a plan that works on paper and a plan that survives. Use consistent definitions so decisions are comparable over time.
Practical checklist
- Write a 1-line definition for "Enterprise Value (EV)" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Equity Value Calculator) to sanity-check assumptions.
- Read the related guide (e.g., Enterprise value vs equity value: how to bridge EV to equity) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Equity Value Calculator: Convert enterprise value (EV) into equity value using cash, debt, and other adjustments (optionally per share).
- DCF Valuation Calculator: Estimate enterprise value using a simple DCF: forecast cash flows, apply a discount rate (often WACC), and add a terminal value.
- Multiple Valuation Calculator: Estimate enterprise value and equity value from a metric (ARR or revenue) and a valuation multiple (with net debt adjustments).
Guides
- Enterprise value vs equity value: how to bridge EV to equity: A practical guide to converting enterprise value (EV) into equity value using net debt and other claims (and avoiding common valuation mix-ups).
- DCF valuation: forecast cash flows, discount rate, and terminal value: A practical guide to DCF valuation and WACC discount rate choices: how to forecast FCF, choose a discount rate, and avoid terminal value traps.
- Multiple valuation: how to use ARR/revenue multiples and avoid mix-ups: A practical guide to multiple-based valuation: choosing a metric, applying EV multiples, and bridging to equity value via net debt.
- Fundraising & valuation hub: pre/post-money, SAFEs, notes, and liquidation prefs: A practical hub for startup fundraising and valuation basics: pre/post-money, pro rata, option pool shuffle, SAFE/note conversion, and liquidation preference outcomes.
- Valuation modeling hub: WACC, DCF, multiples, and equity value: A practical hub for valuation modeling: estimate a discount rate (WACC), run a simple DCF with sensitivity analysis, and translate enterprise value to equity value.