Enterprise Value (EV) is an equation that measures a company’s total value, taking into account its debt, equity, and other elements. It provides a better measure of overall worth than market capitalization because it considers all sources of capital, not just the stock price. To calculate EV, you add up the company’s debt, preferred stock, and common stock to get the value of equity, then subtract the cash and investments on the balance sheet from this figure to get the enterprise value. EV gives stakeholders a better indication of their return on investment, as it highlights the true value of a business and how much money can be generated from its activities.