The "all-in" cost of buying a whole business - market cap plus debt assumed, minus the cash you'd inherit.
Formula
EV = Market Cap + Total Debt + Preferred Equity + Minority Interest − Cash & Equivalents
What it is
Enterprise Value answers: "If I bought every share AND assumed every dollar of debt AND collected every dollar of cash, what would the business actually cost me?"
Why market cap alone misleads
Two companies with the same market cap can be very differently priced once you fold in debt. A company at $1B market cap with $5B of debt costs you $6B to acquire (less the cash). Headlines that say "X has a $20B market cap" without accounting for debt are giving you an incomplete picture.
When you'll see it
EV/EBIT, EV/EBITDA, EV/Revenue — every "EV/" multiple uses this number as the numerator
M&A press releases ("acquired for an enterprise value of $X billion")
Activist letters — they argue about share price relative to enterprise value, not just market cap
Pitfalls
Operating leases (post-2019 accounting) now show as debt — older comparisons may understate EV
Cross-holdings and minority interests need to be added back too for cleanliness