Enterprise Value (EV) Calculator
Calculate Enterprise Value, EV/EBITDA, EV/Revenue, and EV/EBIT valuation multiples.
Understand why EV is better than market cap for comparing companies.
What Is Enterprise Value? Enterprise Value (EV) is the total economic value of a company, what it would cost to buy the entire business including its debt. It is a more complete measure than market capitalization alone.
The Core Formula EV = Market Cap + Total Debt − Cash and Cash Equivalents
Where:
- Market Cap = Share Price × Shares Outstanding
- Total Debt = short-term debt + long-term debt
- Cash is subtracted because a buyer would immediately have access to it
Why Subtract Cash? If you buy a company and it has $100M in cash, that cash offsets the purchase price. You effectively get it back immediately, so cash reduces the true cost of acquiring the company.
Why Add Debt? When you acquire a company, you inherit its debt. A company with $500M market cap but $200M in debt costs you $700M to acquire (minus any cash). Market cap ignores this; EV does not.
EV vs Market Cap Example Company A: Market cap $1B, debt $500M, cash $100M → EV = $1.4B Company B: Market cap $1B, debt $0, cash $200M → EV = $0.8B Both have the same market cap, but Company B is actually cheaper to acquire.
Common EV Multiples
EV/EBITDA: the most common M&A (mergers and acquisitions) valuation metric. It compares enterprise value to operating cash earnings.
| EV/EBITDA | Reading |
|---|---|
| Below 6× | Very cheap, and often a value trap or a distressed business |
| 6–8× | Potentially undervalued |
| 8–12× | Fair value, typical for mature businesses |
| 12–15× | Moderate growth premium |
| 15–25× | High-growth company premium |
| Above 25× | Very high growth expectations already priced in |
These are the bands the calculator uses, so the verdict it prints and the table it prints agree with each other. Sector matters more than the band: a utility at 12× is expensive, a software company at 12× is not.
EV/Revenue: used when EBITDA is negative, which is the normal state of an early-stage company.
- SaaS (Software as a Service) and tech companies: often 5–15× or higher
- Mature businesses: typically 1–3×
EV/EBIT: similar to EV/EBITDA but struck after depreciation, so it is the more conservative of the two. It matters most in capital-heavy industries, where the depreciation EBITDA ignores is a real recurring cost.
Why EV Matters in M&A Investment bankers and private equity firms use EV as the basis for deal pricing. It allows apples-to-apples comparison between companies with very different capital structures (some debt-heavy, some equity-heavy).
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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