What is Enterprise Value ? Compute the Enterprise value from the following information of XYZ Ltd., if the current market price per share is ₹93 : Liabilities (₹ in lakh) Assets (₹ in lakh) Share capital (Face value ₹ 2)

Enterprise Value (EV): Enterprise Value is a measure of a company's total value, often considered a more comprehensive alternative to market capitalization. It represents the total cost of acquiring a company, including its debt, minority interest, and preferred shares, minus its cash and cash equivalents. It is a theoretical takeover price. The formula for Enterprise Value is: Enterprise Value = Market Capitalization + Total Debt + Minority Interest + Preferred Shares - Cash and Cash Equivalents Computation of Enterprise Value for XYZ Ltd.: Calculate Market Capitalization: Share Capital = ₹840 lakh Face Value per share = ₹2 Number of Shares = Share Capital / Face Value = ₹840 lakh / ₹2 = 420 lakh shares Current Market Price per share = ₹93 Market Capitalization = Number of Shares × Market Price per share = 420 lakh shares × ₹93/share = ₹39,060 lakh Identify Total Debt: Short-term debt = ₹2,280 lakh Long-term debt = ₹200 lakh Total Debt = ₹2,280 lakh + ₹200 lakh = ₹2,480 lakh Identify Minority Interest: Minority interest = ₹110 lakh Identify Cash and Cash Equivalents: Cash and cash equivalent = ₹96 lakh Calculate Enterprise Value: Enterprise Value = Market Capitalization + Total Debt + Minority Interest - Cash and Cash Equivalents Enterprise Value = ₹39,060 lakh + ₹2,480 lakh + ₹110 lakh - ₹96 lakh Enterprise Value = ₹41,650 lakh - ₹96 lakh Enterprise Value = ₹41,554 lakh