Enterprise Value (EV) Calculator

Calculate the total economic value of a business by combining market capitalization, debt, and cash positions.

ENTERPRISE VALUE

$55.00L

MARKET CAP

$50.00L

+ DEBT

$10.00L

βˆ’ CASH

$5.00L

EV/EBITDA Multiple: 6.88Γ—

πŸ’‘ What Is Enterprise Value and Why Does It Matter?

Enterprise Value (EV) is the most comprehensive measure of a company's total value. Unlike market capitalization β€” which only reflects the equity portion β€” EV tells you the theoretical takeover price: what an acquirer would pay for the entire business, including assuming all debts and receiving all cash on the balance sheet.

The formula is: EV = Market Capitalization + Total Debt βˆ’ Cash & Cash Equivalents. EV is used as the denominator in key valuation multiples like EV/EBITDA, EV/Revenue, and EV/EBIT. These multiples allow fair comparisons between companies with different capital structures β€” a company with heavy debt and one with no debt can be compared on equal footing.

A company with $50M market cap, $20M debt, and $5M cash has an EV of $65M. If EBITDA is $10M, the EV/EBITDA multiple is 6.5Γ— β€” generally considered attractive for a profitable, stable business.

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