Enterprise Value Calculator
Calculate enterprise value from market capitalization and financial claims. Optionally compare EV with EBITDA, revenue and a target EV/EBITDA multiple.
Results
Enterprise value formula
Enterprise value (EV) = equity market capitalization + interest-bearing debt + preferred equity + non-controlling interest − cash and cash equivalents.
EV/EBITDA = enterprise value ÷ EBITDA. EV/revenue = enterprise value ÷ revenue. For a positive EBITDA and target multiple, target EV = EBITDA × target EV/EBITDA; implied market capitalization = target EV − debt − preferred equity − non-controlling interest + cash.
Verified examples
| Inputs in the selected unit | Enterprise value | Operating comparison |
|---|---|---|
| Market cap 1,500; debt 400; preferred 0; NCI 50; cash 250 | 1,700 | EBITDA 200 gives 8.5000×; revenue 1,000 gives 1.7000× |
| The same inputs, EBITDA 200 and target 9.00× | Target EV 1,800 | Implied market cap 1,600: increase 100 or 6.67% |
| Market cap 500; debt 50; cash 700; other claims 0 | −150 | EBITDA −20 makes EV/EBITDA not meaningful; revenue 100 gives −1.5000× |
| Market cap 300; no debt or other claims; cash 300 | 0 | Net claims / EV is undefined because EV is zero |
How to use the result
Market capitalization measures common equity. Enterprise value adjusts that equity value for debt and other financing claims, then deducts cash in this simplified bridge. It is often used to compare businesses with different capital structures, but only when the financial definitions and dates are consistent.
Use diluted market capitalization when the comparison calls for it. Debt, cash, preferred equity and non-controlling interest should be measured on a compatible date. Use EBITDA or revenue from a period consistent with the market value date and with the comparison companies.
Input limits and assumptions
- Each monetary input allows up to two decimal places and magnitude no greater than 1,000,000,000,000,000 in the selected reporting unit.
- Market capitalization, debt, preferred equity, non-controlling interest, cash and revenue cannot be negative. EBITDA may be negative.
- EV may be negative when cash exceeds market capitalization and the included claims. A negative or zero EBITDA makes the conventional EV/EBITDA multiple unavailable.
- The optional target multiple ranges from 0.01× to 10,000× and is applied only when EBITDA is positive.
- Currency and reporting-unit selectors format the result; they do not retrieve market prices, exchange rates or financial statements.
- This simplified formula does not automatically adjust leases, pensions, associates, derivatives, restricted cash, unfunded obligations or other analyst-specific items.
Enterprise value is an analytical bridge, not an appraisal or investment recommendation. Reconcile every included claim and use like-for-like definitions before comparing multiples.
Frequently asked questions
Why is cash subtracted from enterprise value?
The standard simplified bridge treats available cash as a non-operating asset that reduces the net cost attributed to the operating business. Analysts may adjust which cash is truly excess or available.
Can enterprise value be negative?
Yes. In this simplified calculation, EV is negative when cash exceeds market capitalization plus the included financing claims. That result should be checked for data quality and special circumstances.
Is EV/EBITDA useful when EBITDA is negative?
No. Market practice generally treats the multiple as not meaningful when EBITDA is zero or negative.
Related calculators
- P/E Ratio Calculator — compare equity market value with earnings.
- EBITDA Calculator — derive EBITDA and operating margins.
- Business Valuation Calculator — estimate value from operating multiples or net assets.
- WACC Calculator — estimate a weighted cost of capital.