What Does Total Value Mean on Robinhood?


If you are new to investing, Robinhood is the way to do it. It’s perfect for beginners and great for making money over long periods of time. Yet, if you’re new to investing you may find yourself with some questions. What does total value mean on Robinhood? How can you see how much money you earn? 

The term total value on Robinhood means the measure of how much a business is worth or what the financial market is willing to pay for all of the company’s shares. This can be represented in values such as total enterprise, book, intrinsic, and market values.  The total value is also shown in the amount you made on Robinhood. 

Businesses have a value of how much they are worth and what people are willing to pay for the company’s shares. There are five different types of values that you can use to find the total value. Read on to learn the difference and how to calculate the total value of your business. 

What Does “Total Value” Mean on Robinhood? 

The total value is how much your company is worth. This can be calculated by looking at your balances, equity, debt, and assets. This is also called market capitalization. Here are four types of values that can be used to consider the total value of the business: 

  • Enterprise value
  • Book value
  • Market Value
    • Fair Market Value
  • Intrinsic value
  • Portfolio Value.

Each value type considers different aspects of the business, and some estimate the company’s total value better than others. 

Is Enterprise Value Different Than Total Value? 

The enterprise value is the total value of the target company for investors. This is one of the best representations of the total value of a business as it shows the total cost of purchasing the company.

To calculate the enterprise value, you add the total market capitalization and debts and subtract cash. 

If a company had a share price of $232.35 and had 3.34 billion shares of the company’s stock outstanding, the market capitalization was just over 775. The financial disclosure reports $11B in short-term debts, $74B in long-term debts, and $4B in cash equivalents. We can calculate the total enterprise value by adding 11B + 74B – 4 B leaving a total value of 81B. 

Is Book Value Different Than Total Value? 

Book value is the number of assets minus the liabilities of a company. Each real purchase is recorded in a company balance sheet. You can consider the total value of your company by using the assets recorded in the sheet and subtracting the liabilities from them.

Book value also considers the value of each asset.

Assets depreciate over time, as they get worn and torn or used often. As they begin to wear down, they lose value, but you also purchase new things that add value. If you add the values of the new assets and subtract the worth of liabilities (older assets that need fixing), you can calculate the book value of your company. 

Think of book value as the amount of money your company would sell for if it was liquidated. You need to add the total of all tangible assets and subtract the cost of other intangible assets.

Then, remove all liabilities. In this formula, you will receive your company’s worth and how much you would receive if someone were to buy your company. 

The following table shows the difference between book value and enterprise value:

How To Calculate Enterprise How To Calculate Book Value
total market capitalization + debts – the cashvalue of assets – the value of liabilities.

What Are Market Value and Fair Value on Robinhood? 

Market value and fair value are two different ways of valuation. Market value is similar to fair market value, yet it is what an asset is worth at the given moment, with external pressures and little to no knowledge of how much it is worth. Fair market value is the amount of money an asset will sell for if the consumer is knowledgeable and performing the transaction free of pressure. 

The following table shows the differences between enterprise value, book value, and market value: 

Enterprise ValueBook ValueMarket ValueFair Market Value
The amount needed to purchase a companyThe amount a business and its assets are worth if it were liquidated todayViews of what other similar companies are selling for that can change every day.Show market value with no external pressures and the agreement of the consumer

Is Intrinsic Value a Representation of Total Value?

Intrinsic value is another way to show your company’s total worth. Robinhood describes intrinsic value as the worth based on its assets and cash flows rather than its stock price.

You can predict the high value in the future, but your company will continue to have a low intrinsic value until you meet the sales goal. 

For example, your company just launched a new product, and there is a prediction of high sales. Yet, truthfully, your company is currently getting low sales and having to pay production costs. This would mean your intrinsic value is not worth much, and consumers would typically pass on purchasing your company. 

What Is Total Portfolio Value? 

Your portfolio shows you a breakdown of your finances, where you spend your money, and how much you have to pay. Total portfolio value shows your company’s worth by analyzing the number of stocks, bonds, and cash you have. Your portfolio will deliver your company’s value and divide it into different sections based on your financial records. 

How Do I Know How Much I Have Made on Robinhood?

If you purchase stocks on Robinhood and want to see your earnings, select the company name. Then select the stock detail page. Continue to the following page that says profits. You will see the earnings per share in the last term. 

If the earnings are increasing, the stock will rise. If the EPS decreases, your stock is likely to drop as well. 

To calculate how much you have made in your stocks, you can go to your profile page and view the profit/loss tab on the homepage. This will show your earnings or your losses throughout the current term. 

Plus, Robinhood shows you robust long term data and trends to show you how well your stocks have been doing and what you have earned over a long period of time! 

Final Thoughts

Investing in stocks and businesses is risky as the rates constantly change. You can be sure to invest in an outstanding stock or company by calculating the total value. This can be done using enterprise value or book value, as they will give you a clearer image of how much the business is worth. Either way, it’s essential to analyze before investing and have faith in the company you invest in. 

Thanks for reading folks! I hope this was helpful!

Geek, out.

Noel

Noel is the founder and main contributor for his blog - Noel's passion for personal finance has helped him amass over 600k readers to his Financial Geek blog.

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