What is equity value calculation?

Equity value refers to the total value of a company's shares outstanding. It measures the current market value of all shareholders' equity invested in the business. Equity value is calculated using the following formula:

Equity Value = Latest Closing Stock Price x Total Diluted Shares Outstanding

Where:

• The latest Closing Stock Price is the current market price of one share of the company's stock.
• Total Diluted Shares Outstanding include common shares, preferred shares, share options, warrants, and convertible securities that can potentially become common shares.

Equity value indicates what shareholders would receive if all of the company's assets were liquidated and liabilities paid off at current market prices. It is an important metric used in company valuation and financial analysis. For a quicker calculation, you can use an online equity calculator.

Comparing equity value to the company's enterprise value can show whether it is trading at a premium or discount relative to its debt obligations and assets.