Microsoft's enterprise-value legs — the same walk, a different balance sheet

mentor: You assembled the filed legs of enterprise valueDefinitionEnterprise valueWhat it would cost to own the whole business: the equity's market value plus the debt the buyer assumes, minus the cash that comes along with the keys. It is the numerator of the capital-structure-neutral multiples (EV/EBITDA, EV/Sales), because it prices the enterprise regardless of how the current owners chose to finance it.EV = Market cap + Total debt − Cash & equivalentsDrivers: Market cap · Debt · CashFull definition → once. The assembly is only a tool if it travels — and every balance sheet gives it a different character: the borrowing lines a filer presents, the cash beside them, and the mix between the two decide what netting actually does to the number.

Below are the borrowing lines Microsoft presents on its balance sheet — commercial paper and term debt — plus the cash, all from one filed instant, via SEC EDGAR. Assemble them, net the cash, and read how this filer's mix changes the story the same arithmetic told last time. The honest limits stand: the debt perimeter is an analyst's call, and market capitalizationDefinitionMarket capitalizationThe market's price for all of a company's equity: the share price times the shares outstanding. It is the equity leg of enterprise value and the denominator convention for index weightings — a market quantity that moves every trading day, not a filed figure that moves every quarter.Market cap = Share price × Shares outstandingDrivers: Price · Share countFull definition → still takes a share price no filing carries.

Total borrowings = commercial paper + current portion of long-term debt + long-term debt. Net of cash = total borrowings − cash and equivalents. Work in billions of dollars, two decimals. EVDefinitionEnterprise valueWhat it would cost to own the whole business: the equity's market value plus the debt the buyer assumes, minus the cash that comes along with the keys. It is the numerator of the capital-structure-neutral multiples (EV/EBITDA, EV/Sales), because it prices the enterprise regardless of how the current owners chose to finance it.EV = Market cap + Total debt − Cash & equivalentsDrivers: Market cap · Debt · CashFull definition → — market capDefinitionMarket capitalizationThe market's price for all of a company's equity: the share price times the shares outstanding. It is the equity leg of enterprise value and the denominator convention for index weightings — a market quantity that moves every trading day, not a filed figure that moves every quarter.Market cap = Share price × Shares outstandingDrivers: Price · Share countFull definition → + net debtDefinitionNet debtTotal debt minus cash and equivalents — the debt that would remain if the company paid down borrowings with the cash on hand today. It is the bridge between market capitalization and enterprise value, and the quickest read on balance-sheet risk: negative net debt means the cash pile exceeds the borrowings.Net debt = Total debt − Cash & equivalentsDrivers: Borrowing · Cash generation · Capital returnsFull definition → — waits on a price.