Terminology

Winsight's picture
Rank: Monkey | banana points 37

Hi fellows,

I have a question about the abbreviations for "enterprise value" and "equity value".

I know that in most textbooks, enterprise value is abbreviated by EV. But when I read EV, I always have that slight doubt whether enterprise value or equity value is meant. Because in both names, both words start by E and V.

Therefore: why are ENterprise Value and EQuity Value not abbreviated by ENV and EQV respectively? This makes undoubtedly clear what the abbreviation stands for.

I know, tens or maybe hundreds of thousands of courses, books and websites would have to be changed, but once and for all, the doubt of tens of thousands who yearly learn about valuation would make place for certainty!

And after the death of the current generation (including me) no one would even talk about it anymore.

I would appreciate your thoughts.

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Comments (6)

Jan 31, 2019

EV is not an abbreviation for Equity Value. Equity value does not have a traditional abbreviation as far as I know. You'd call it shares, stock, equity value.

Remind me again how you're a certified Partner in M&A?

    • 1
Jan 31, 2019

Dear - When you will read my post again, you will notice that I mention EV as Enterprise Value. Only, I also mentioned that the first letters of Equity Value are also EV and that this is confusing.

    • 1
Jan 31, 2019

I know how to read.

EV means Enterprise Value. Equity Value, in the vast majority of IMs, documents, textbooks etc. does not have an abbreviation.

Jan 31, 2019

... which does not want to say it cannot improve. If I would ask you to abbreviate Equity Value following the normal practice, how would you do that? Language is so important to give insight in science but if not applied consistently, it creates confusion. To my opinion this is the case with EV.

Jan 31, 2019

If that's how you go about and live your life, then I don't know what to say.

Oh, and finance is not a science.

Jan 31, 2019
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