Enterprise Value vs Equity Value - Investment Banking Interview Qs

In this video, we cover the concepts of Enterprise Value vs Equity Value. Enterprise Value in particular is a tricky concept for many people to grasp. We've created a framework here to make the concept much more clear.

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Learn how to answer interview questions from a former Investment Banking (UBS LA), Private Equity (Golden Gate Capital + HIG Capital) and Investment Management ($200B Mutual Fund / $2B Hedge Fund) practitioner…and Adjunct Professor in Columbia Business School’s Value Investing Program who has trained thousands of current IB/PE/HF/MF professionals.

00:00 – Intro
00:09 – Video Context & Overview
00:38 – A House is a Business
01:12 – Equivalent Boxes of Values
01:17 – What is Enterprise Value?
02:03 – Why is Enterprise Value an ‘Unlevered Value’ or 'Unlevered Valuation'?
03:08 – Working from Enterprise Value to Equity Value – Intro
03:29 – Working from Enterprise Value to Equity Value – Our Equity in the House/Business (Before Cash)
04:59 – The Equity Value Formula - Intro
05:22 – The Equity Value Formula – Impact of Debt
05:36 – The Equity Value Formula – Impact of Cash
06:27 – The Equity Value Formula – Formula in Action
07:01 – The Enterprise Value Formula – Intro
07:56 – The Enterprise Value Formula – Equity Value
08:37 – The Enterprise Value Formula – Impact of Cash
09:01 – The Enterprise Value Formula – Impact of Debt
09:58 – The Enterprise Value Formula – Formula in Action
11:00 – Wrap-Up

Hope this is helpful and let us know if you have any questions in the comment section below.

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