Market cap tells you the value of everything: both the business and its money (cash & debt). Enterprise value is the value of the business (the thing actually

Market cap tells you the value of everything: both the business and its money (cash & debt). Enterprise value is the value of the business (the thing actually generating value) separate from the cash & debt it's holding. For example, if I have a banana stand worth $250K, but inside the banana stand is a briefcase with $245K, then the $250K is not really the value of the banana stand - it's mostly the value of the cash inside. The Enterprise value of the banana stand is only $5K. With the debt, the idea is the same but the sign is opposite. So if Ford is worth $50B while holding onto $100B of debt, that implies that the enterprise value is $150B. Comparing the valuations of Ford and Tesla without subtracting out cash and debt is like running a race without mentioning that the losing racer started a half mile behind. Though they 'lost' by one metric, they're still the faster runner.