What Is Equity Value?

By Kristi Waterworth – Updated Dec 31, 2024 at 4:57 PM

Key Points

Equity value measures total shareholder investment, differentiating from market cap by including all shareholder types.
Enterprise value adds company debts to equity value, offering a fuller financial snapshot and future direction.
To calculate equity value, subtract debts and add cash equivalents to enterprise value.

Looking at balance sheets and examining stock performance metrics are important when you're choosing investments for the long term. Equity value is one of those metrics that doesn't seem very interesting at first but might mean a lot down the line.

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A business person calculating profit from revenue. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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