Enterprise Value Calculator
Calculate enterprise value (EV) to determine the total value of a business including equity and debt. EV provides a comprehensive view of a company's valuation for mergers, acquisitions, and investment analysis.
Company Valuation Components
Enterprise Value Results
Enterprise Value:
$0.00
Equity Value:
$0.00
Net Debt:
$0.00
Valuation Ratios
Debt-to-Equity Ratio:
0.00x
Cash-to-Debt Ratio:
0.00x
EV Components:
N/A
Business Insights
Capital Structure:
N/A
Liquidity Position:
N/A
Acquisition Appeal:
N/A
Understanding Enterprise Value
Enterprise Value (EV) represents the total value of a company, including both equity and debt. It provides a more comprehensive view of a company's worth than market capitalization alone, making it essential for business valuation, mergers and acquisitions, and investment analysis.
Enterprise Value Formula
Basic Formula
- EV = Market Cap + Total Debt - Cash & Equivalents
- Market Cap = Share Price × Outstanding Shares
- Total Debt = All interest-bearing liabilities
- Cash = Cash and cash equivalents
Complete Formula
- EV = Market Cap + Debt + Minority Interest - Cash
- Includes preferred stock and minority interests
- Excludes non-operating assets/liabilities
- Represents operational value
Why Enterprise Value Matters
Key Advantages
EV vs Market Capitalization
Capital Structure Neutral
- Includes debt in valuation
- Allows comparison across companies
- Independent of financing decisions
- Better for acquisition analysis
Comprehensive View
- Includes all claimholders
- Represents total business value
- Useful for enterprise valuation
- Foundation for multiples analysis
EV Applications
Mergers & Acquisitions
- Determines acquisition price
- Compares target valuations
- Assesses takeover premiums
- Calculates synergies
Valuation Multiples
- EV/EBITDA ratios
- EV/EBIT multiples
- EV/Sales ratios
- Comparable company analysis
Components of Enterprise Value
| Component | Included In EV | Reason | Impact |
|---|---|---|---|
| Market Cap | Yes | Equity value to shareholders | Base component |
| Total Debt | Yes | Obligations to debtholders | Increases EV |
| Cash & Equivalents | No (subtracted) | Available to pay obligations | Decreases EV |
| Minority Interest | Yes | Non-controlling ownership | Increases EV |
EV vs Equity Value
Enterprise Value
- Total business value
- All claimholders included
- Capital structure neutral
- Used for operations-focused analysis
Equity Value
- Shareholder value only
- Market capitalization
- Affected by leverage
- Used for shareholder analysis
Industry Considerations
Capital Intensive Industries
- High debt levels common
- EV significantly higher than equity value
- Important for infrastructure, utilities
- Debt financing is normal
Technology Companies
- Often low debt, high cash
- EV may be lower than market cap
- Cash-rich balance sheets
- Conservative capital structures
Key Takeaways for Enterprise Value
- Enterprise Value = Market Cap + Debt - Cash represents the total value of a business
- EV provides a more comprehensive valuation than market capitalization alone
- EV is capital structure neutral, making it useful for comparing companies
- Used extensively in mergers and acquisitions to determine acquisition prices
- EV multiples (EV/EBITDA, EV/EBIT) are standard valuation metrics
- Cash reduces EV, debt increases EV in the calculation
- EV represents the cost to acquire the entire business operations
- Different industries have different typical EV characteristics