Enterprise Value Calculator
Calculate enterprise value (EV) for public companies or estimate business value using EBITDA multiples. Perfect for M&A analysis, investment decisions, and private company valuation.
Enterprise Value Formula
EV = Market Cap + Total Debt + Preferred Stock + Minority Interest - Cash
Enterprise value represents the total cost to acquire a company, including debt obligations minus available cash.
🏢 Company Financials
Enter the company's financial data to calculate its enterprise value. All fields are in USD.
Share price × Outstanding shares
Short-term + Long-term debt
Value of preferred shares (if any)
Non-controlling interest in subsidiaries
Cash, marketable securities, liquid assets
📊 Enterprise Value
Enterprise Value (EV)
$11.50M
$11,500,000
Calculation Breakdown
Net Debt
$1.50M
EV / Market Cap
1.15x
📊 EV/EBITDA Multiples by Industry
| Industry | Low | Typical | High | Notes |
|---|---|---|---|---|
| Software / SaaS | 8x | 10x | 15x | Recurring revenue commands premium |
| Healthcare | 7x | 9x | 12x | Regulated, stable cash flows |
| Financial Services | 6x | 8x | 12x | Asset-heavy, regulated |
| Manufacturing | 5x | 6x | 8x | Capital intensive, cyclical |
| Professional Services | 4x | 6x | 8x | People-dependent, lower capex |
| Retail / E-commerce | 4x | 5x | 7x | Margin pressure, competition |
| Construction | 4x | 5x | 6x | Project-based, cyclical |
| Restaurant / Food | 3x | 4x | 6x | High competition, thin margins |
| Transportation / Logistics | 4x | 5x | 7x | Asset-heavy, fuel costs |
* Multiples are indicative and vary based on company size, growth rate, profitability, and market conditions. Higher growth and margins typically command higher multiples.
🏢 Understanding Enterprise Value
What is Enterprise Value?
Enterprise Value (EV) represents the total value of a company - what it would theoretically cost to acquire the entire business. Unlike market capitalization, which only reflects the value of equity (shares), EV accounts for debt obligations and cash on hand, giving a more complete picture of a company's worth.
Enterprise Value vs. Equity Value
Equity Value (Market Cap) is what shareholders own - share price times shares outstanding.Enterprise Value is what you'd pay to own the entire business, including assuming its debts. When acquiring a company, you pay for the equity but also take on responsibility for debts (minus any cash you receive).
Why Use EV/EBITDA for Valuation?
EV/EBITDA is preferred over P/E ratios for comparing companies because it's capital structure neutral - it doesn't matter how a company is financed. Two identical businesses with different debt levels will have similar EV/EBITDA multiples but very different P/E ratios. This makes it ideal for M&A analysis and comparing companies across industries.
📐 EV Formula
EV =
+ Market Cap
+ Total Debt
+ Preferred Stock
+ Minority Interest
- Cash & Equivalents
💡 Quick Tips
- Higher growth = Higher multiple
- Recurring revenue = Premium valuation
- Net debt negative = Cash-rich company
- Always compare to industry peers
- EBITDA should be "normalized" (adjusted)
Bookmark this page
Press Ctrl+D (⌘+D on Mac) for quick access next time.
Related Tools
Frequently Asked Questions
Enterprise Value (EV) is calculated using the formula: EV = Market Capitalization + Total Debt + Preferred Stock + Minority Interest - Cash and Cash Equivalents. For example, a company with $10M market cap, $2M debt, and $500K cash has an EV of $11.5M. This represents the theoretical takeover price of a company.
A business with $500,000 in annual revenue could be worth $500K to $2.5M depending on profitability and industry. If the business has 20% EBITDA margins ($100K EBITDA) and trades at 5x EBITDA, the enterprise value would be $500,000. Revenue multiples typically range from 0.5x to 3x for most small businesses, with SaaS companies commanding higher multiples (3x-10x revenue).
If 10% of a company is worth $100,000, the total equity value is $1,000,000 ($100,000 ÷ 0.10). To find enterprise value, add total debt and subtract cash. For example, if the company has $200K debt and $50K cash: EV = $1,000,000 + $200,000 - $50,000 = $1,150,000.
Cash is subtracted because when acquiring a company, the buyer effectively receives the company's cash. This cash can be used to pay off debt or offset the purchase price. Think of it as buying a house with money in a safe inside - you get that money as part of the deal, reducing your net cost. Enterprise value represents the net cost to acquire and control the business.
A 'good' EV/EBITDA ratio depends on the industry. Software/SaaS companies typically trade at 8-15x EBITDA, while manufacturing trades at 5-8x. Generally, ratios below 10x are considered reasonable for most industries. Lower multiples may indicate undervaluation or higher risk, while higher multiples suggest growth expectations or premium quality. Always compare to industry peers.
To value your business: 1) Calculate your adjusted EBITDA (add back owner salary, one-time expenses), 2) Research industry multiples (typically 3-8x EBITDA for small businesses), 3) Multiply EBITDA × multiple to get enterprise value, 4) Subtract debt and add excess cash for equity value. For a business with $200K EBITDA at 5x multiple: EV = $1M, and if you have $100K debt, equity value = $900K.
🏢 Disclaimer: This calculator provides estimates for educational purposes only. Actual company valuations depend on many factors including growth prospects, market conditions, competitive position, and quality of earnings. Consult with qualified financial advisors for investment or M&A decisions.