A measure of a company's value as a whole. Enterprise Value is used primarily in circumstances requiring a business valuation, such as in the acquisition of a target company (for example, in a buyout of a private company or a going private transaction) or in a minority investment. Enterprise value reflects the economic value of a company at a point in time, typically based on an analysis of a company's earnings or EBITDA multiplied by an appropriate multiple (usually determined based on the company's industry).

An acquiror of a business can use enterprise value in measuring what to pay for the target company. Once enterprise value is established, it can be allocated to the claims on that value by the company's owners and debt providers to arrive at an equity value for the business. Enterprise value can be expressed formulaically as the company’s equity value plus its outstanding preferred stock and funded debt minus the company’s cash and cash equivalents.