Enterprise Value (EV) Calculator and EV/EBITDA Multiple
The enterprise value of a company — what it would cost to buy the whole business, debt included, less the cash you would get — and the EV/EBITDA, EV/EBIT and EV/sales multiples.
Results
What this tool does
Market capitalisation only prices the shares. A buyer of the whole company also takes on its debt, but gets its cash, so the enterprise value is market cap plus debt (and minority and preferred claims) minus cash. That is why EV, not market cap, is the right numerator when you compare a profit that belongs to everyone who funds the firm — EBITDA or EBIT — and why two companies with the same P/E can have very different EV multiples if one is heavily indebted. Compare multiples only within the same sector and with the same year of earnings.
Formula
EV = market cap + debt + minority interests and preferreds − cash · multiples = EV ÷ EBITDA, EV ÷ EBIT, EV ÷ sales
Variables
| Symbol | Meaning | Unit |
|---|---|---|
mc | Market capitalisation (shares × price) | — |
td | Total debt | — |
ca | Cash and cash equivalents | — |
mi | Minority interests and preferred shares (0 if none) | — |
eda | EBITDA | — |
eb | Operating profit (EBIT) | — |
sa | Sales (revenue) | — |
EV | Enterprise value (EV) | — |
ND | Net debt (debt − cash) | — |
M1 | EV ÷ EBITDA | — |
M2 | EV ÷ EBIT | — |
M3 | EV ÷ sales | — |
Worked example
- Market capitalisation (shares × price)5000
- Total debt1500
- Cash and cash equivalents500
- Minority interests and preferred shares (0 if none)0
- EBITDA700
- Operating profit (EBIT)500
- Sales (revenue)3000
- Enterprise value (EV)6000.0
- Net debt (debt − cash)1000.0
- EV ÷ EBITDA8.57
- EV ÷ EBIT12.00
- EV ÷ sales2.00
Limitations
- This is an informational calculator, not personalised financial advice. Rates, fees, taxes and contract conditions vary between institutions and countries.
- The tool works with whatever currency you use for the inputs; it does not convert between currencies.