# What is the enterprise value?

Computes enterprise value (EV): market capitalization plus debt, preferred stock and noncontrolling interests, minus cash, with net debt and EV/EBITDA.

- Page: https://www.acalculator.org/finance/enterprise-value-calculator
- JSON spec: https://www.acalculator.org/finance/enterprise-value-calculator.json
- Version: 6507d7880334

## Default answer

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).

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| from | I know the | Whether you know the share price and the number of shares, or the market capitalization itself. |
| price | Share price | The market price of one common share. |
| shares | Shares outstanding | The number of common shares held by investors. |
| cap | Market capitalization | The market value of all common shares: share price × shares. |
| debt | Total debt | Short-term and long-term borrowing, including the current part of long-term debt. |
| pref | Preferred stock | The value of preferred shares, a claim ahead of the common shares. Optional. |
| nci | Noncontrolling (minority) interests | The part of subsidiaries the company consolidates but does not own. Optional. |
| cash | Cash and cash equivalents | Cash and short-term investments on the balance sheet. |
| ebitda | EBITDA | Earnings before interest, taxes, depreciation and amortization, for EV/EBITDA. Optional. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| ev | Enterprise value (EV) | Market cap + debt + preferred stock + noncontrolling interests − cash. |
| marketCap | Market capitalization | Share price × shares outstanding, or the market cap typed. |
| netDebt | Net debt | Total debt − cash; negative when cash is larger. |
| multiple | EV/EBITDA | Enterprise value ÷ EBITDA, when EBITDA is given. |

## 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.

## Assumptions

- 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

1. from = price, price = $50.00, shares = 10,000,000, debt = $150,000,000.00, cash = $50,000,000.00 gives ev = $600,000,000.00, marketCap = $500,000,000.00, netDebt = $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.
2. from = cap, cap = $2,400,000,000.00, debt = $800,000,000.00, pref = $100,000,000.00, nci = $50,000,000.00, cash = $350,000,000.00, ebitda = $300,000,000.00 gives ev = $3,000,000,000.00, netDebt = $450,000,000.00, multiple = 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.
3. from = price, price = $12.50, shares = 4,000,000, debt = $0.00, cash = $60,000,000.00 gives ev = -$10,000,000.00, marketCap = $50,000,000.00, netDebt = -$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.
4. from = price, price = $37.25, shares = 2,345,678, debt = $12,000,000.75, pref = $1,500,000.00, nci = $250,000.50, cash = $3,456,789.12, ebitda = $9,876,543.21 gives marketCap = $87,376,505.50, ev = $97,669,717.63, multiple = 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.

## FAQ

### 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.

## Sources

- OpenStax, Principles of Finance, 11.1 Multiple Approaches to Stock Valuation: enterprise value is a measurement of the total value of a company; Figure 11.2 shows it as the market value of equity plus net debt (debt minus cash and equivalents); EV multiples such as EV/Revenue, EV/EBIT and EV/EBITDA. https://openstax.org/books/principles-finance/pages/11-1-multiple-approaches-to-stock-valuation (retrieved 2026-10-19)
- Aswath Damodaran, NYU Stern School of Business, Variables used in Data Set: enterprise value = market value of equity + market value of debt − cash; market value of equity = number of shares outstanding × share price; value/EBITDA = (market value of equity + value of debt − cash) ÷ EBITDA. https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/variable.htm (retrieved 2026-10-19)
- Aswath Damodaran, The Little Book of Valuation, Per Share Value: from the value of the operating assets, cash is added and the market value of minority interests and other claims is subtracted to reach the value of equity; Determining Debt and Equity: preferred stock shares many characteristics with unsecured debt. https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook/valuepershare.htm and https://pages.stern.nyu.edu/~adamodar/New_Home_Page/littlebook/liabilities.htm (retrieved 2026-10-19)