EV takes into account not only a company?s market value (i.e. its market capitalization) but also its level of debt. The idea behind it is that a company?s buyer purchases the debt in addition to getting the cash as part of the deal.
EV is particularly useful when trying to compare companies with different debt levels

Enterprise Value =	Market capitalization + Net debt + Minority interests
with
Market capitalization =	Total shares outstanding x Share close price
Net debt =	Total interest bearing debt
	+ Redeemable preferred shares
	+ Preferred shares
	- Cash & Equivalents
	- Short Term Investments

NB: The Current Enterprise Value is calculated with the current market capitalization.

The net debt figure is taken from the last annual report of the company.

Infinancials has improved its calculation methodology for the Enterprise Value (EV) in August 2008, by adding the Minority Interests to the EV calculation formula.

EBITDA/Net sales is commonly used to measure the profitability of a company, as well as EBIT/Net sales. EBITDA provides a better comparison between companies from different countries as it avoids the impact of different domestic amortization rules. EBITDA is also useful when comparing companies from different sectors in the same country, as amortization rates are closely linked to the business itself.