Enterprise Value Calculator
Calculate enterprise value (EV) — the takeover value of a business, capital-structure-neutral — using the standard EV = Market Cap + Debt + Preferred + Minority − Cash identity.
Enterprise value
£2,400,000,000.00
- Equity value (market cap)
- £2,000,000,000.00
- Net debt (debt − cash)
- £400,000,000.00
- Preferred + minority
- £0.00
- EV / equity ratio
- 1.2
- Debt as % of EV
- 20.83%
EV = Market Cap + Total Debt + Preferred Equity + Minority Interest − Cash. It is the takeover value of the whole enterprise: an acquirer assumes the debt and inherits the cash, so cash is netted off. Because EV is capital-structure-neutral, EV / EBITDA and EV / Sales are the standard multiples for cross-company valuation. If EV is below market cap, the company holds more cash than debt — common for cash-rich tech and pharma balance sheets.
How to use this calculator
Enter market capitalization (share price × diluted shares outstanding), total interest-bearing debt (short-term + long-term, from the balance sheet), cash and cash equivalents (including short-term marketable securities), preferred equity at book value, and any minority (non-controlling) interest. The calculator returns enterprise value as the headline, plus net debt, the EV-to-equity ratio, and debt as a percentage of EV.
How the calculation works
Enterprise value answers the question: what would it cost to buy this whole business today? An acquirer would pay shareholders for their equity (market cap), assume the firm's debt, settle preferred and minority claims, and then — because the cash on the balance sheet now belongs to them — net that cash back off. The result is capital-structure-neutral: two firms with identical operations but different debt/equity splits will trade at similar EV / EBITDA multiples even though their P/E ratios differ wildly. That is why M&A bankers, private-equity analysts, and credit teams quote EV multiples rather than equity multiples for cross-company comparison.
Worked example
Mid-cap industrial: market cap $2,000M, total debt $500M, cash $100M, no preferred, no minority. EV = 2,000 + 500 − 100 = $2,400M. Net debt = $400M (positive — geared firm). If EBITDA is $300M, EV / EBITDA = 8.0× — broadly in line with US industrials. Apple FY2023 (rounded 10-K figures): market cap ≈ $2,870B, debt $111B, cash $61.5B, preferred 0, minority 0 → EV ≈ $2,919.5B. Net debt is positive but small relative to cap, so EV is barely above market cap — typical for cash-rich tech.
Frequently asked questions
Why subtract cash from enterprise value?
Because an acquirer who buys the company inherits the cash sitting on its balance sheet — and could immediately use that cash to pay off some of the purchase price. The economic cost of the takeover is therefore the equity bought plus the debt assumed minus the cash received. Subtracting cash gives a clean view of what the buyer is actually paying for the operating business. Two firms with identical operations but one holding $1B more cash will look identical on EV, even though their market caps differ by that $1B.
What is the difference between enterprise value and equity value (market cap)?
Equity value is what shareholders own — share price × shares outstanding. Enterprise value is what the whole business is worth, including the slice owed to debt-holders, preferred shareholders, and minority shareholders, less the cash inside the firm. For an all-equity, cash-free company the two are equal. For a leveraged firm, EV is materially above market cap. For a cash-rich firm with little debt (think Apple historically, or Berkshire), EV can sit below market cap. EV multiples are used for cross-company comparison; equity multiples (P/E) are used to compare share-price levels.
Should I include short-term debt, lease liabilities, and pensions?
Best practice is to include all interest-bearing obligations: short-term debt, the current portion of long-term debt, finance / capital lease liabilities (which IFRS 16 and ASC 842 now bring on-balance-sheet), and underfunded pension obligations net of any plan assets. Operating leases under IFRS 16 already sit in lease liabilities and should be included. The principle: anything an acquirer would either repay at closing or assume as a fixed claim ahead of equity belongs in debt for EV. Trade payables, accrued expenses, and deferred revenue are working-capital items and stay out.
Why do EV / EBITDA multiples vary so much by industry?
EV multiples reflect three things: growth (faster-growing firms trade richer), risk (lower-risk firms trade richer), and capital intensity (more capital-intensive firms trade lower because EBITDA overstates true cash flow). Typical EV / EBITDA bands: utilities and pipelines 8–11×, integrated oil and gas 4–7×, industrial manufacturing 8–12×, retail and consumer discretionary 8–14×, branded consumer goods 12–18×, healthcare and pharma 10–16×, software / SaaS 15–30× (and much higher for high-growth names), banks and insurers — EV multiples are not used (capital structure is the business). Always compare within an industry, not across.
Can enterprise value be negative?
Yes, though it is rare and usually signals distress or a special situation. If a company's cash exceeds its market cap plus debt plus preferred plus minority, EV goes negative — meaning the market is pricing the operating business as worth less than zero. Most often this happens to small-cap firms with collapsed share prices but legacy cash hoards, or to liquidation candidates. A negative EV trade is rare but is a classic deep-value setup: if the operating business is not actively destroying value, the buyer is being paid to take it. Always check why before assuming there is a bargain.
Where do I find the input numbers in published accounts?
Market cap: live share price from any data provider × diluted shares outstanding (cover of the 10-K / annual report). Total debt: balance sheet — sum of short-term borrowings, current portion of long-term debt, long-term debt, and finance lease liabilities. Cash: balance sheet, "cash and cash equivalents" plus short-term marketable securities (be consistent). Preferred equity: balance sheet equity section, book value (or fair value if marked). Minority interest: balance sheet equity, sometimes called "non-controlling interest". Use the most recent quarterly balance sheet for the debt and cash figures and the latest closing market cap — EV is a point-in-time figure.