Enterprise Value Calculator
The true takeover value of a business, beyond market cap
The example already filled in below
The boxes below are not empty, and the numbers in them are not a real company. They describe an invented one, a mid-sized haulage business, picked because it carries a little debt and a little cash and so shows every part of the formula doing something. It has 100 million shares trading at $50.00 each, which values the shares at $5,000.00 million. It owes $40.00 million to its lenders and holds $20.00 million in the bank. Buying the whole thing therefore costs $5,000.00 million for the shares, plus the $40.00 million of debt the new owner inherits, less the $20.00 million of cash that comes with it: $5,020.00 million. Against EBITDA of $300.00 million, that is 16.73 times earnings. Change any box and the answer follows immediately; this paragraph stays as it is, so you always have something to compare against.
Fill in what the company is worth and what it owes
Two things to know before you start. The share price is the plain quoted price of one share; every other figure here, the share count included, goes in millions, which is how annual reports print them. And the dollar signs are only a default: any currency works, as long as every figure on this page is in the same one.
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The quoted price of a single share, not in millions.
The diluted share count, in millions. 100 means one hundred million shares.
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Short-term and long-term debt added together, in millions. Enter 0 if there is none.
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What the company has in the bank and in near-cash holdings, in millions.
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Most companies show nothing here, so 0 is a normal answer. It can be below zero.
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Most listed companies have issued none, so 0 is a normal answer.
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Optional. It turns the answer into the EV/EBITDA multiple. A minus sign is allowed if the company lost money.
Free, no sign-up, and the answer below updates as you type.
What the whole business costs
Enterprise value
$5,020.00 million
The shares are worth $5,000.00 million between them. Anyone buying the company outright would also take on $40.00 million of debt, and would find $20.00 million of cash sitting in its accounts on the first morning, which comes straight off the price. So controlling this business really costs $5,020.00 million.
Where that figure comes from
| Value of the shares (market cap) | $5,000.00 million |
| + Debt the buyer takes on | $40.00 million |
| + Share held by other owners | $0.00 million |
| + Preferred shares | $0.00 million |
| − Cash the buyer gets back | $20.00 million |
| Enterprise value | $5,020.00 million |
All five parts are listed, zeros included, so you can add them up yourself and land on the same total. Only the cash is taken off; everything else is added, because everything else is something a buyer has to pay for or take on.
What that is as an EV/EBITDA multiple
16.73x
At $5,020.00 million, the whole business is priced at 16.73 times the $300.00 million it earns before interest, tax and depreciation are taken off. Read it as the number of years of those earnings a buyer is paying for. It only tells you something next to another number: the same company a year ago, or a competitor in the same industry. What counts as high or low varies enormously from one industry to another, so there is no single figure to aim for.
What if the share price moves?
The balance sheet figures hold still for months at a time; the share price is different by tomorrow morning. So this is what your answer looks like at a range of prices, with everything else left exactly as you entered it.
| If one share costs | the whole business costs | which is EV/EBITDA of |
|---|---|---|
| $40.00-20% | $4,020.00 million | 13.40x |
| $45.00-10% | $4,520.00 million | 15.07x |
| $50.00your price | $5,020.00 million | 16.73x |
| $55.00+10% | $5,520.00 million | 18.40x |
| $60.00+20% | $6,020.00 million | 20.07x |
Notice that the enterprise value does not move as fast as the share price in percentage terms, because the debt and the cash sit there unchanged while only the equity part moves. The more debt a company carries, the less a swing in its share price shifts the price of the whole business.
Worth remembering: Two companies whose shares add up to the same amount can cost wildly different sums to buy outright, because one may be carrying heavy borrowings and the other sitting on cash. That is the whole reason enterprise value, rather than the value of the shares, goes on top of the EV/EBITDA and EV/Sales multiples.
Enterprise value (EV) reflects the total value of a company's operating business, independent of how it is financed. It starts from market capitalization, the value of the equity, and adjusts for the capital that sits outside common shareholders: debt is added, cash is subtracted, and any minority interest or preferred equity is included.
EV = Market Cap + Debt − Cash + Minority + Preferred
Step 1: Put in the quoted price of one share and how many shares exist, in millions. Multiplying the two gives what the stock market says the shares are worth altogether.
Step 2: Take total borrowings and cash off the balance sheet and enter both in millions, the same units as the share count. The tooltip beside each box says exactly which lines to look for.
Step 3: Leave the last two boxes at 0 unless the company genuinely has outside owners in its subsidiaries or has issued preferred shares. Add EBITDA if you want the multiple as well.
Step 4: Read the answer below, which changes with every keystroke. The breakdown shows each part of the sum, and the table underneath shows how the answer would look at other share prices.
What Is Enterprise Value?
Enterprise value (EV) is a measure of a company's total worth that captures the entire capital structure, not just the equity. It answers a practical question: if you wanted to buy the whole business outright, what would it really cost? Because an acquirer would take on the company's debt and gain its cash, enterprise value adds debt and subtracts cash on top of the equity value. For this reason EV is often described as the theoretical takeover price of a company.
Enterprise value is central to professional valuation. It is the numerator in the most widely used valuation multiples, EV/EBITDA and EV/Sales, and it is the figure analysts compare across companies in the same industry. You can read a fuller definition in our glossary entry on enterprise value, which sits alongside related concepts like the EV/EBITDA multiple.
The Enterprise Value Formula
EV = Market Cap + Total Debt − Cash + Minority Interest + Preferred Equity
The formula begins with market capitalization, which is simply the share price multiplied by the number of shares outstanding. This is the value of the common equity. Debt is then added because anyone acquiring the business inherits the obligation to repay or refinance it, so that liability is part of the true acquisition cost.
Cash and equivalents are subtracted because the acquirer immediately gains the company's cash, which can be used to reduce the effective purchase price. Minority interest and preferred equity are added when present, because they represent claims on the business held by parties other than common shareholders. The result is a single number that reflects the value of the operating enterprise, regardless of how it happens to be financed.
Why Enterprise Value Is Not the Same as Market Cap
Market capitalization only tells you what the equity of a company is worth. Two businesses can have identical market caps yet very different enterprise values. A company financed largely with debt will have an enterprise value well above its market cap, while a company sitting on a large cash pile may have an enterprise value below it. Comparing companies on market cap alone can therefore be misleading, because it ignores the balance sheet entirely.
This is why enterprise value is the preferred starting point for valuation multiples. The EV/EBITDA multiple, enterprise value divided by earnings before interest, taxes, depreciation and amortization, is neutral to capital structure and accounting choices, making it well suited to comparing companies with different debt levels. EV/Sales applies the same logic to revenue, which is useful for businesses that are not yet profitable. For a focused tool, see our EBITDA calculator, and to estimate a discount rate for valuation work, the WACC calculator.
When to Use EV vs the P/E Ratio
The price-to-earnings (P/E) ratio is intuitive and widely quoted, but it looks only at equity and net income, which makes it sensitive to leverage, tax rates, and depreciation policy. Enterprise-value multiples step back to value the whole business, so they are generally more reliable when comparing companies with different capital structures or when analysing capital-intensive industries and mergers. In practice, many investors review enterprise-value multiples alongside the P/E ratio rather than relying on any single figure. Our blog explains this in more depth in EV/EBITDA explained, and you can review the EV/EBITDA glossary entry for a concise definition.
Frequently Asked Questions About the Enterprise Value Calculator
Market capitalization only measures the value of a company's equity (share price times shares outstanding). Enterprise value (EV) measures the value of the entire business, both equity and debt, net of cash. It represents the theoretical takeover price, because an acquirer would assume the company's debt and gain access to its cash. Two companies with the same market cap can have very different enterprise values if one carries large debt and the other holds substantial cash.
Debt is added because an acquirer taking over the company must repay or assume its outstanding debt, so that obligation is part of the true cost of acquisition. Cash is subtracted because the acquirer gains the company's cash on day one, which can immediately be used to offset the purchase price. The result is a measure of what it actually costs to control the operating business, independent of how it is financed.
EV/EBITDA is useful when comparing companies with different capital structures, tax situations, or levels of depreciation, because it is neutral to financing and ignores non-cash charges. It is widely used for capital-intensive industries and in mergers and acquisitions. The P/E ratio focuses only on equity and net income, which makes it more familiar but more sensitive to leverage, tax rates, and accounting choices. Many analysts review both rather than relying on a single multiple.
Yes. When a company holds more cash than the stock market pays for its shares plus whatever it owes, the arithmetic gives an enterprise value below zero. In plain terms the market is valuing the operating business at less than nothing, which usually happens to companies expected to keep burning that cash, or to businesses trading well below the value of what sits on their balance sheet. It is a genuine signal worth investigating, but it makes the EV/EBITDA multiple meaningless, which is why this calculator writes out what has happened instead of printing a negative multiple.
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Educational use only. This tool provides estimates for informational purposes and does not constitute financial, investment, tax, or legal advice. Results are based on inputs you provide and mathematical models, they do not guarantee future performance. Always consult a qualified financial adviser before making investment decisions.