A business example
A hypothetical transaction starts with ₹50 lakh enterprise value, ₹8 lakh debt and ₹3 lakh cash.
Operating value
The agreed enterprise-value starting point is ₹50 lakh.
Debt and cash
Subtract ₹8 lakh debt and add ₹3 lakh cash.
Equity bridge
The simplified equity value is ₹45 lakh.
What this shows
The bridge explains why a headline enterprise value differs from shareholder value. Actual transactions can include further adjustments and different definitions.
What it is often confused with
Enterprise value and equity value differ; a negotiated price may also differ from an estimate.
What to look at in your business
Document the purpose, valuation date, method and bridge to the proposed price.
Context and further reading
This entry explains the business term. The related guide below provides the next layer of context; any applicable legal test depends on the transaction and relevant period.
Kosha.Services · Updated 2 October 2026