The review of enterprise value calculation is constructive in this clip; Sal once again explains how market capitalization can be a misleading valuation metric. He breaks down an example and plugs in numbers to get the EV, then presents whether this is a fair number. He suggests an even stronger valuation is EV to operating profit or EV to EBITDA. Sal reviews why he feels these offer sound numbers, calculating a hypothetical net income to illustrate the difference between EBIT and EBITDA. He suggests five times EBITDA as a firm valuation but notes relativity as an essential variable. Be sure scholars have watched the videos on depreciation and amortization before viewing this one.