How would the enterprise value treat these two companies? The enterprise value penalizes the company with debt by adding the debt onto the market cap. It rewards the company with cash by taking away the cash from the market cap. The company that owes $5 million in debt has an enterprise value of $15 million ($10 million in market cap + $5 million in debt). The company with $5 million in cash has an enterprise value of $5 million ($10 million in market cap – $5 million in cash).
