Angie · learn
Equity value
What is left for shareholders once the lenders have been paid.
How it is calculated
Equity value = enterprise value − net debt
A fuller explanation of this one is still being written. The definition above is the short answer.
See also
- Enterprise value — The value of the whole operating business, before asking who has a claim on it. Debt holders are paid before shareholders, so this is not yet what the shares are worth.
- Net debt — Positive means a net borrower, negative means net cash. Subtracted from enterprise value to reach what shareholders own.
- Intrinsic value — Angie's estimate of what one share is worth, built from the company's own cash rather than from what anyone will pay. Compare it to today's price.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
