When do you use enterprise value?

Use EV for operating metrics like EBITDA or EBIT so capital structure is neutral.

How do you bridge EV to equity value?

Add cash, subtract debt, and adjust for NCI, preferred, and other claims.

Enterprise Value vs Equity Value: Clean Bridge Rules (2025)

A clean EV vs equity value explanation, bridge steps, and interview examples so you never mix operating value with shareholder value again in practice.

Short definitions

Enterprise Value: value of the entire operating business.
Equity Value: value attributable to common shareholders.

Bridge (EV to equity)

Equity Value = EV + Cash - Debt - Preferred - NCI
Use EV with operating metrics like EBITDA or EBIT.
Use Equity Value with per-share metrics like EPS.

Interview example

"A company at $1.0B EV with $100m cash and $300m debt has $800m equity value. Divide by diluted shares to get price per share."

Common mistakes

Comparing EV to equity metrics or vice versa.
Ignoring NCI or preferred equity.