The Firm Value Formula, also known as the Enterprise Value Formula, is a financial concept used to obtain an estimate of the total value of a company or business. It combines the company’s market capitalization and its net debt, taking into account various elements such as equity cash holdings, minority interests, non-operating assets, and preferred stock. This formula helps financial analysts to understand the true worth of a firm by considering all outstanding debts and liabilities instead of simply relying on the current market price. With this, investors can predict the returns they may get from investing in the company and make more informed decisions.