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Understanding Enterprise Value (EV) requires taking the perspective of a company engaged in the takeover of a listed entity.
Firstly, the cash in the company will become the property of the acquirer and is therefore deducted from the EV.
The debt in the takeover target will be paid by the acquirer and therefore will add to the cost and therefore enterprise value of the acquirer.
The right-of-use liabilities are also added.
Finally, the market capitalisation is the base for calculating the enterprise value.
So;
EV = Market Capitalisation + Interest Bearing Debt + Right-of-use Liabilities - Cash & Short-term Investments