Calculate the total value of a company's business operations, inclusive of both equity and debt, minus surplus cash.
Capital Structure
Total Valuation
Enterprise Value$1,200,000Operations + Debt Value
Enterprise Value Bridge
About this calculator
Overview
Calculate the total value of a company's business operations, inclusive of both equity and debt, minus surplus cash.
💡
Pro Tips
What is Enterprise Value?: Enterprise Value (EV) is a comprehensive measure of a company's total value. It is essentially the price an acquirer would have to pay to buy the entire business, as they would take on the debt and keep the cash.
Why use EV instead of Market Cap?: Market Cap only tells you what the equity is worth. EV accounts for the company's debt level. A company with $1B market cap and $1B debt is much more expensive to acquire than one with $1B market cap and no debt.
Why is cash subtracted?: Cash is subtracted because, in an acquisition, the buyer can use the company's own cash to immediately pay down some of the purchase price.
!
Fun Facts
"Enterprise Value is the 'EV' in the popular 'EV/EBITDA' valuation multiple."
"Negative EV is possible! It happens when a company has more cash than its market cap and debt combined, essentially meaning you get 'paid' to take over the business."
"EV is often referred to as the 'theoretical takeover price'."
