Equity Value
Definition
The value attributable to equity holders, calculated as enterprise value minus net debt. Net debt is total debt minus cash and cash equivalents. Equity value is the value that equity holders would receive in a liquidity event after all debt obligations are settled. For companies with no debt and material cash balances, equity value differs materially from enterprise value.
Common Misapplication
The most common misapplication is treating equity value and enterprise value as equivalent for companies with outstanding debt. A company with enterprise value of ten million pounds and two million pounds of outstanding debt has an equity value of eight million pounds, not ten million, before accounting for any liquidation preference stack.
FFI Standard Reference
This term is defined and applied in Book 4, Section 4.1: The Valuation Methodology Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Equity Value. https://ffistandard.org/glossary/equity-value/. 2026.