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Valuation Mechanics · Concept Explainer · Standard · 5 ppFree

Enterprise value

The one-line check every multiple depends on

1 min preview · 2026-09-25

What the price implies
12 of 13 agree within 5% · AT&T apart, by +5.6% · every input on the same page

Executive summary

Enterprise value is what a buyer of the whole business would pay: the equity, plus the debts the buyer inherits, minus the cash the buyer receives. This explainer states the formula, re-derives the provider's published figure for thirteen large US listings at the 24 September 2026 close, and walks through the components the one-line formula leaves out.

12 of the 13 agree with the provider's own published enterprise value within 5%. AT&T disagrees by +5.6%, a gap of about $18bn that is roughly its operating lease liability: a definitional choice, visible on the balance sheet and reconciled here rather than left as a discrepancy.

The set spans sizes deliberately, from lululemon at about $11.3bn to NVIDIA above $5,423bn, so the check reads the same at every scale; lululemon and NVIDIA are covered in companion IWP reports, IWP's guidance tracker on lululemon among them, which states its capitalisation on a different, disclosed basis (close times filed shares) from the provider field used here.

Key points
  • Enterprise value is market capitalisation plus total debt less cash. Every input is published, and the arithmetic is one line on any company's quarterly balance sheet.
  • It matters most where debt is largest: Verizon's computed enterprise value is 1.98x its market capitalisation and AT&T's 1.85x.
  • 12 of 13 companies tested match the data provider's own arithmetic within 5%.
  • A wrong enterprise value silently corrupts every multiple built on it: EV/EBITDA, EV/sales and net debt to EBITDA inherit the error in proportion, and the result looks like an expensive company rather than a data fault.
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In the full report
  • The formula, and why each term is there
  • The series, charted
  • Checking the number your data provider gives you
  • What the one-line formula leaves out
  • What breaks downstream
  • Applying the check