# Equity Value

*Corporate Finance & M&A — Finicade finance glossary*

Equity value is what the shareholders' stake is worth; enterprise value is what the whole business is worth to all capital providers. Bridging them is basic and constantly botched: enterprise value minus net debt gives equity value. The distinction is why revenue and EBITDA multiples use enterprise value while earnings multiples like P/E use equity value — matching the numerator's claimants to the denominator's.

**Formula:** `Equity value = Enterprise value − Net debt`

**Also known as:** market cap vs equity value, value of equity

**Related terms:** [Enterprise Value](https://finicade.com/glossary/enterprise-value), [Market Capitalization](https://finicade.com/glossary/market-capitalization), [Discounted Cash Flow (DCF)](https://finicade.com/glossary/dcf), [Valuation Multiple](https://finicade.com/glossary/valuation-multiple)

Source: https://finicade.com/glossary/equity-value