What does enterprise value (EV) indicate?

Enterprise value (EV) represents the total value of a business in terms of both its equity and debt, minus any cash and cash equivalents. It provides a comprehensive measure of a company's total value, which is crucial for potential buyers or investors because it reflects what it would cost to acquire the entire company. This metric is particularly useful in mergers and acquisitions, as it gives a clearer picture of a company's worth compared to just looking at its market capitalization, which only considers equity.

In contrast, the other options do not encapsulate the full extent of what enterprise value signifies. For instance, it does not merely reflect the selling price of an individual asset, only the company's equity, or its market share. Instead, EV encompasses the entire enterprise, including all debt obligations and subtracts any available cash, thus offering a clearer picture of the company's financial health and value in the context of acquisition or investment.