CodesBeautify

Enterprise Value Calculator

Price the whole business rather than only the shares, using market cap adjusted for debt and cash.

Inputs
Enterprise valueEnterprise value ready
Enterprise value27,180,000,000.00
Formula
EVMarket cap + Total debt + Preferred equity + Minority interest - Cash
Inputs
Share price76.50
Shares outstanding320,000,000
Total debt4,200,000,000.00
Cash and equivalents1,500,000,000.00
Minority interest0.00
Preferred equity0.00
Working
Market cap76.50 x 320,000,000 = 24,480,000,000.00
Net debt4,200,000,000.00 - 1,500,000,000.00 = 2,700,000,000.00
Enterprise value24,480,000,000.00 + 2,700,000,000.00 = 27,180,000,000.00
Result
Enterprise value27,180,000,000.00
Market cap24,480,000,000.00
Net debt2,700,000,000.00
EV as multiple of market cap1.110x
Capital structureNet borrower, EV sits above market cap
Runs locally in your browser

About the Enterprise Value Calculator

Enterprise value answers what a buyer would really pay to own the operations outright. Buying every share is only part of it, because the acquirer inherits the borrowings and gets the cash pile in return. So the build is EV = market cap + total debt + preferred equity + minority interest - cash. Two companies with identical share prices can carry wildly different enterprise values once the balance sheet is folded in.

Enter the share price and share count and the market capitalisation is computed for you. Total debt should cover short term borrowings, long term borrowings and the capitalised value of leases where the accounts recognise them. Cash covers bank balances and liquid investments that a buyer could sweep on day one. Minority interest and preferred equity are claims from outside the ordinary shareholder base, so they are added rather than ignored.

The result shows net debt separately, since that single figure explains why EV sits above or below the market cap. A company sitting on more cash than debt shows a negative net debt and an enterprise value smaller than its equity value. EV is the numerator in multiples such as EV to EBITDA and EV to sales, both of which compare businesses with different funding mixes more fairly than a price to earnings ratio. For the equity side on its own, use the Market Capitalization Calculator.

How to use

  1. Enter the current share price and the fully diluted share count.
  2. Add short and long term debt from the balance sheet, including finance leases.
  3. Type the cash and equivalents balance that a buyer could take over.
  4. Fill in minority interest and preferred equity if the group has any, then read the EV and net debt.

Common questions

Why is cash subtracted?
A buyer can use the acquired cash to pay part of the purchase price, so the effective cost of the business falls by that amount.
Should I use book or market value of debt?
Market value is more correct in theory. Book value is close enough for most bank debt, but distressed or long dated bonds can trade well away from par.
Do operating leases count as debt?
Under current reporting standards they already appear as lease liabilities on the balance sheet, so include them in total debt.
Can enterprise value be negative?
Yes, when a company holds more cash than its debt and market cap combined. It is rare and usually signals a distressed or cash rich shell.