Enterprise value (EV) measures the total cost to acquire the entire company, not just the equity. It equals market cap (equity value) + debt − cash (+ minority interest and preferred stock, if material). Think of it as the theoretical takeover price: you buy all the equity (market cap), assume the debt, but get to keep the cash. For example, a company with $10B market cap, $2B debt, and $1B cash has EV = $11B. EV is used in valuation multiples (EV/EBITDA, EV/Sales) because it's capital-structure neutral — it values the operating business regardless of how it's financed.