Operating EV rather than total EV is generally best for valuation multiples One of the common mistakes we identify below is omitting full consideration of this non-controlling interest. The other 40% non-controlling interest is also a claim on that enterprise. For example, if a subsidiary is consolidated then enterprise value would include 100% of the value of that component of the business even if the group investment is only 60%. Total enterprise value should be the value of the activities included in the scope of the group consolidated financial statements. To derive total EV, you need to include all financing claims. Total enterprise value is the sum of the value of a company’s operating business plus any other value creating activities such as a separate investment portfolio, investment properties and associates not treated as part of operations. It is important to distinguish between total and operating enterprise value. Total enterprise value versus operating enterprise value

Similarly, enterprise value is the market value of the company’s business, which equals the sum of the value of the various financing claims such as debt and equity. Most investors are familiar with the accounting equation where assets equal liabilities plus equity. By claims we mean the interest of debt holders, shareholders and others who benefit from that business enterprise through a return on their investment. It also equals the value of the various claims on that business. Enterprise value represents the value of the wealth creating activities of a business.

$nvda enterprise value