MV BV and EV

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kfp22

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I’m confused between book value, market value and enterprise value (I think I’ve seen more similar stuff but I don’t remember now)
can anyone explain the difference please?
 
market value=Market vlaue of Debt+ Market value of Equity
Enterprise Value= Market Value - Cash and cash equivalents
Book Value is the value of debt + equity that is presented in the most recent audited balance sheet of the firm
 
Thanks for the input. However I still don’t get the rationale behind these definitions (especially on Book value which seems to have conflicting understanding from you guys)
Lets say my balance sheet consists of:
Asset: $3 cash, + $12 fixed assets (total $15)
Liability: $2 payables + $8 debt (total $10)
Equity: Asset-Liability = $5
So according to the formulas..
MV = $5 + $8 = $13 ? (what is the intuitive meaning of this $13 of my balance sheet? I can’t draw any meaning from it)
EV = $13 - $2 = $11 ? (again.. looking at the breakdown of the BS, $11 seems to mean nothing to me..)
BV = $5 ? or $$13 ?
Thanks a lot
 
Only book-value uses the balance sheet. The other 2 use market values (fair values).
Book value of equity = Assets - liability = $5
MV = Can’t answer because you haven’t provided market value of debt or equity (bookvalue of equity != MV of equity).
EV = MV - Cash.
 
mehdizaman wrote:
Book Value is the value of debt + equity that is presented in the most recent audited balance sheet of the firm
Click to expand...
I just hit the book my explanation of BV is wrong.
Book Value = Assets (stated on Balance Sheet) - Liabilities (stated on Balance Sheet)
 
Thanks a lot all, this clarifies a lot
 
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