What is the difference between market cap and enterprise value?
An example of an AI chatbot conversation about market cap vs enterprise value.
What is the difference between market cap and enterprise value?
Market cap is the total market value of a company's outstanding shares, while enterprise value includes debt and cash.
Can you give me an example of how to calculate both?
Sure! If a company has 1 million shares at $50 each, its market cap is $50 million. If it has $10 million in debt and $5 million in cash, its enterprise value is $55 million.
Why is enterprise value considered a better measure?
Enterprise value is often seen as a better measure because it accounts for debt and cash, providing a clearer picture of a company's total value.
Are there any situations where market cap is more useful?
Yes, market cap is useful for assessing a company's size and comparing it with others in the same industry.
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