What is the enterprise value?
Enter the share price and the number of shares (or the market cap), the company's debt, preferred stock, noncontrolling interests and cash. The enterprise value calculator adds the claims, takes off the cash, and shows net debt and EV/EBITDA when you give EBITDA.
- Enterprise value (EV)
- $600,000,000.00
Market cap of $500,000,000.00 plus the other claims, less cash, gives an enterprise value of $600,000,000.00 (net debt $100,000,000.00).
- Market capitalization
- $500,000,000.00
- Net debt
- $100,000,000.00
Enterprise value (EV): $600,000,000.00. Market cap of $500,000,000.00 plus the other claims, less cash, gives an enterprise value of $600,000,000.00 (net debt $100,000,000.00).
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes enterprise value (EV): market capitalization plus debt, preferred stock and noncontrolling interests, minus cash, with net debt and EV/EBITDA.
Example with the default inputs (I know the Share price and shares, Share price $50.00, Shares outstanding 10,000,000, Total debt $150,000,000.00, Preferred stock $0.00, Noncontrolling (minority) interests $0.00, Cash and cash equivalents $50,000,000.00): Market cap of $500,000,000.00 plus the other claims, less cash, gives an enterprise value of $600,000,000.00 (net debt $100,000,000.00).
Method: Market cap = share price × shares outstanding. Enterprise value = market cap + total debt + preferred stock + noncontrolling interests − cash and cash equivalents. EV/EBITDA = enterprise value ÷ EBITDA.
- Market values are best; book values of debt and preferred stock are the usual stand-in when no market price exists.
- Debt is interest-bearing borrowing, not accounts payable; an empty preferred stock or noncontrolling interests box counts as $0.
- Arithmetic is exact on the decimals you type; money shows to the cent and EV/EBITDA to 2 decimals, halves up.
Worked examples
Each example is checked against the calculator on every build.
- I know the Share price and shares, Share price $50.00, Shares outstanding 10,000,000, Total debt $150,000,000.00, Cash and cash equivalents $50,000,000.00 gives Enterprise value (EV) $600,000,000.00, Market capitalization $500,000,000.00, Net debt $100,000,000.00.Source: OpenStax, Principles of Finance, 11.1 Multiple Approaches to Stock Valuation (enterprise value is the total value of a company: the market value of equity plus net debt, debt minus cash and equivalents; EV/EBITDA). https://openstax.org/books/principles-finance/pages/11-1-multiple-approaches-to-stock-valuation; Aswath Damodaran, NYU Stern, Variables used in Data Set (enterprise value = market value of equity + debt − cash; market value of equity = shares outstanding × share price). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm
- I know the Market cap, Market capitalization $2,400,000,000.00, Total debt $800,000,000.00, Preferred stock $100,000,000.00, Noncontrolling (minority) interests $50,000,000.00, Cash and cash equivalents $350,000,000.00, EBITDA $300,000,000.00 gives Enterprise value (EV) $3,000,000,000.00, Net debt $450,000,000.00, EV/EBITDA 10.Source: OpenStax, Principles of Finance, 11.1 Multiple Approaches to Stock Valuation (enterprise value is the total value of a company: the market value of equity plus net debt, debt minus cash and equivalents; EV/EBITDA). https://openstax.org/books/principles-finance/pages/11-1-multiple-approaches-to-stock-valuation; Aswath Damodaran, NYU Stern, Variables used in Data Set (enterprise value = market value of equity + debt − cash; market value of equity = shares outstanding × share price). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm
- I know the Share price and shares, Share price $12.50, Shares outstanding 4,000,000, Total debt $0.00, Cash and cash equivalents $60,000,000.00 gives Enterprise value (EV) -$10,000,000.00, Market capitalization $50,000,000.00, Net debt -$60,000,000.00.Source: OpenStax, Principles of Finance, 11.1 Multiple Approaches to Stock Valuation (enterprise value is the total value of a company: the market value of equity plus net debt, debt minus cash and equivalents; EV/EBITDA). https://openstax.org/books/principles-finance/pages/11-1-multiple-approaches-to-stock-valuation; Aswath Damodaran, NYU Stern, Variables used in Data Set (enterprise value = market value of equity + debt − cash; market value of equity = shares outstanding × share price). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm
- I know the Share price and shares, Share price $37.25, Shares outstanding 2,345,678, Total debt $12,000,000.75, Preferred stock $1,500,000.00, Noncontrolling (minority) interests $250,000.50, Cash and cash equivalents $3,456,789.12, EBITDA $9,876,543.21 gives Market capitalization $87,376,505.50, Enterprise value (EV) $97,669,717.63, EV/EBITDA 9.89.Source: OpenStax, Principles of Finance, 11.1 Multiple Approaches to Stock Valuation (enterprise value is the total value of a company: the market value of equity plus net debt, debt minus cash and equivalents; EV/EBITDA). https://openstax.org/books/principles-finance/pages/11-1-multiple-approaches-to-stock-valuation; Aswath Damodaran, NYU Stern, Variables used in Data Set (enterprise value = market value of equity + debt − cash; market value of equity = shares outstanding × share price). https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm
How it works
- Market cap = share price × shares outstanding (or the market cap you type)
- Enterprise value = market cap + total debt + preferred stock + noncontrolling interests − cash and cash equivalents
- Net debt = total debt − cash and cash equivalents
- EV/EBITDA = enterprise value ÷ EBITDA, shown only when you give EBITDA
Rules:
- The share price and the number of shares must be more than 0. EBITDA, when given, must be more than $0. Every other amount is $0 or more; an empty preferred stock or noncontrolling interests box counts as $0.
- Amounts are at most $1 quadrillion each; shares at most 10 trillion.
- Enterprise value and net debt may be negative (more cash than the claims).
- A result too large to show as a number gives no answer. So does a result that is not 0 but too small to show as a number.
- The arithmetic is exact on the decimals you type. Money shows to the cent and EV/EBITDA to 2 decimals, with halves rounded up (away from 0).
Assumptions
- Use market values where you have them. For debt and preferred stock, the book value on the balance sheet is the usual stand-in when they do not trade.
- Total debt is interest-bearing borrowing, short-term and long-term. It does not include accounts payable or other operating liabilities.
Worked examples by hand
10 million shares at $50. Market cap = 50 × 10,000,000 = $500,000,000. EV = 500,000,000 + 150,000,000 − 50,000,000 = $600,000,000. Net debt = 150,000,000 − 50,000,000 = $100,000,000.
Every claim, with EBITDA. Market cap $2,400,000,000, debt $800,000,000, preferred stock $100,000,000, noncontrolling interests $50,000,000 and cash $350,000,000: EV = 2,400 + 800 + 100 + 50 − 350 = $3,000,000,000 (in millions). Net debt = $450,000,000. With EBITDA of $300,000,000, EV/EBITDA = 3,000 ÷ 300 = 10.
More cash than the claims. 4,000,000 shares at $12.50 = $50,000,000, no debt and $60,000,000 of cash: EV = 50,000,000 − 60,000,000 = −$10,000,000.
Cents in every amount. 2,345,678 shares at $37.25 = $87,376,505.50. EV = 87,376,505.50 + 12,000,000.75 + 1,500,000 + 250,000.50 − 3,456,789.12 = $97,669,717.63. With EBITDA of $9,876,543.21, EV/EBITDA = 9.889…, shown as 9.89.
Other questions people ask
What is enterprise value?
Enterprise value (EV) is the value of a whole business to everyone with a claim on it: the market value of its shares plus its debt and the other claims ahead of or beside the common shareholders, less the cash it holds. It is often used instead of market capitalization when companies carry different amounts of debt.
How do I calculate enterprise value?
Multiply the share price by the shares outstanding to get the market cap. Add total debt, preferred stock and noncontrolling interests, then subtract cash and cash equivalents. 10,000,000 shares at $50 is a $500,000,000 market cap; with $150,000,000 of debt and $50,000,000 of cash, EV is $600,000,000.
Why is cash subtracted from enterprise value?
A buyer of the whole business gets its cash too, which could pay down debt at once, so the cash lowers the net price of the operating business. Debt minus cash is the net debt.
Why are preferred stock and minority interests added?
They are claims on the business that the common shares do not include. Preferred shareholders are paid ahead of common shareholders, and noncontrolling (minority) interests own part of subsidiaries whose whole results the company reports. Leave a box empty when the company has none.
Can enterprise value be negative?
Yes, when a company holds more cash than the market value of its shares plus its debt and other claims. A $50,000,000 market cap with no debt and $60,000,000 of cash gives an EV of −$10,000,000.
What is EV/EBITDA?
Enterprise value divided by earnings before interest, taxes, depreciation and amortization. It compares the value of the business with its operating earnings before the effects of how it is financed. An EV of $3,000,000,000 and EBITDA of $300,000,000 give a multiple of 10.