Quick answer
Enterprise Value = Market Cap + Total Debt − Cash & Equivalents. Example: $500M market cap + $100M debt − $50M cash = EV $550M. At $40M EBITDA: EV/EBITDA = 13.8x.
How to use this calculator
Enter Market Capitalisation (share price × shares outstanding — find on any financial data site), Total Debt (short-term + long-term debt from the balance sheet), and Cash & Equivalents (cash + short-term investments). Optionally enter EBITDA and Revenue to calculate the EV/EBITDA and EV/Revenue valuation multiples.
Use figures from the same date. For a valuation context, use the latest reported balance sheet data paired with last twelve months (LTM) EBITDA and revenue.
Enterprise Value formula
Enterprise Value represents the theoretical total acquisition cost of a business — what an acquirer would pay to own 100% of the company, assuming they take on all debt but receive all cash:
$$\text{EV} = \text{Market Cap} + \text{Total Debt} - \text{Cash \& Equivalents}$$
The logic: an acquirer must pay market cap to equity holders, assume responsibility for all debt, but gains immediate access to the cash balance. Net debt (Total Debt − Cash) therefore adjusts the equity price to the true cost of taking over the business.
EV multiples are derived by dividing enterprise value by an earnings or revenue metric:
$$\text{EV/EBITDA} = \frac{\text{Enterprise Value}}{\text{EBITDA}}$$
$$\text{EV/Revenue} = \frac{\text{Enterprise Value}}{\text{Revenue}}$$
EV/EBITDA is the most widely used valuation multiple in M&A and private equity because it is capital-structure-neutral and comparable across different geographies and tax jurisdictions.
Enterprise Value vs. market capitalisation
Market cap is the value of a company's equity — shares outstanding × share price. Enterprise Value is the total value of the business including all sources of capital:
| Market Cap | Enterprise Value | |
|---|---|---|
| What it measures | Equity value only | Total business value (equity + net debt) |
| Affected by capital structure | Yes | No — capital-structure-neutral |
| Use case | P/E ratio, shareholder returns | M&A, LBO, cross-company comparisons |
| Paired metric | Earnings (EPS, net income) | EBITDA, Revenue, EBIT |
| Affected by leverage | Yes — debt raises risk, affects P/E | No — debt/cash is already in EV |
EV/EBITDA and EV/Revenue multiples
EV multiples answer the question: "how many times earnings (or revenue) is the market valuing this business?" A lower multiple indicates a cheaper valuation relative to earnings; a higher multiple implies growth expectations are priced in.
| Multiple | Measures | Best for | Limitation |
|---|---|---|---|
| EV/EBITDA | Earnings-based valuation | Profitable businesses; M&A; LBO screening | Ignores CapEx; unsuitable for loss-makers |
| EV/Revenue | Revenue-based valuation | High-growth, pre-profit companies (SaaS, biotech) | Doesn't account for profitability differences |
| EV/EBIT | Operating income valuation | Capital-intensive businesses (D&A is real cost) | More volatile than EBITDA |
| EV/FCF | Cash-flow-based valuation | Cash-generative mature businesses | FCF can be distorted by CapEx timing |
Worked examples
| Company | Market Cap | Debt | Cash | EV | EBITDA | EV/EBITDA |
|---|---|---|---|---|---|---|
| SaaS startup | $200M | $10M | $30M | $180M | $8M | 22.5x |
| Manufacturing co | $500M | $200M | $50M | $650M | $90M | 7.2x |
| Retail chain | $1,000M | $300M | $100M | $1,200M | $160M | 7.5x |
| Cash-heavy tech | $800M | $0M | $400M | $400M | $60M | 6.7x |
Note the cash-heavy tech company: its market cap is $800M but EV is only $400M because $400M of the share price is just cash. The EV/EBITDA of 6.7x reflects the value of the operating business alone.
EV/EBITDA benchmarks by industry
| Industry | EV/EBITDA range | EV/Revenue range |
|---|---|---|
| SaaS / Software | 15x – 30x+ | 5x – 15x |
| Healthcare / Pharma | 10x – 18x | 3x – 8x |
| Consumer Staples | 10x – 15x | 1x – 3x |
| Industrial / Manufacturing | 6x – 12x | 0.5x – 2x |
| Telecom | 5x – 9x | 1x – 3x |
| Retail | 4x – 8x | 0.3x – 1x |
| Oil & Gas | 4x – 8x | 0.5x – 2x |
Frequently asked questions
What is Enterprise Value?
Enterprise Value (EV) is the total value of a business including both equity and net debt. It represents what an acquirer would theoretically pay to own 100% of the company: EV = Market Cap + Total Debt − Cash. It is the preferred starting point for valuation because it is capital-structure-neutral.
Why subtract cash from Enterprise Value?
In an acquisition, the buyer gains ownership of all the company's cash, which reduces their net cost. If you buy a company for its market cap but the company holds $50M in cash, your effective outlay for the operating business is market cap minus $50M. Enterprise Value normalises for this by treating net debt (debt minus cash) as the adjustment to equity value.
What is a good EV/EBITDA multiple?
Depends entirely on the industry and growth profile. SaaS companies: 15x–30x+. Healthcare: 10x–18x. Manufacturing: 6x–12x. Retail: 4x–8x. Compare against direct industry peers and historical averages, not cross-sector benchmarks.
Can Enterprise Value be negative?
Yes, when cash exceeds market cap plus debt. This means the stock trades below its net cash value — theoretically cheap, but usually signals the market is pricing in significant operational losses or risks that will consume the cash balance.
What debt should I include in the EV calculation?
Include all interest-bearing financial debt: short-term bank debt, long-term bonds, term loans, revolving credit facilities, finance/capital leases, and the current portion of long-term debt. Exclude non-financial liabilities like accounts payable, deferred revenue, and accrued expenses — these are already captured in the EBITDA or cash flow metrics used alongside EV.