Enterprise Value Calculator
This is an online enterprise value calculator.
What is Enterprise Value?
Enterprise value (EV) is an economic measure reflecting the market value of a business. It is a measure of a company’s total value, often used as a more comprehensive alternative to equity market capitalization. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt as well as any cash on the company’s balance sheet. Enterprise value is one of the fundamental metrics used in business valuation, financial modeling, accounting, portfolio analysis, and risk analysis.
As the market cap, EV is a measure of what the market believes a company is worth. Enterprise value captures the cost of an entire business, including debt and equity. It is a sum of claims of all preferred shareholders, debt holders, security holders, common equity holders, and minority shareholders. But unlike market cap, which only captures the total value of common equity securities.
Typically, EV is considered the theoretical purchase takeover price of a business because a purchaser would take on the company’s debt while pocketing the company’s cash and gaining a right to all of the company’s future earnings.
Enterprise Value = Market Capitalization + Debt + Minority Shares + Preferred Stock – Total Cash and Cash Equivalents
Enterprise value example