Enterprise Value Calculator

Enterprise value (EV) is the total value of a company to all of its capital providers, both equity and debt holders. It's often described as the theoretical price to acquire a business outright. EV equals market capitalization plus total debt plus preferred stock plus minority interest, minus cash and cash equivalents.

Take shares outstanding * share price to get market capitalization. Add total short-term and long-term debt. Add preferred stock and minority interest if present. Subtract cash and cash equivalents. The result is enterprise value. A company with $500M market cap, $100M debt and $20M cash has an EV of $580M.

It means the full economic value of a company's operating business, independent of how that business is financed. Because it adds debt and subtracts cash, EV lets you compare two companies with very different capital structures on equal footing, which market capitalization alone cannot do.

Because an acquirer receives the target's cash upon purchase and can immediately use it to pay down the debt it assumed. The cash reduces the effective cost of the acquisition, so it's subtracted. Buying a company with $100M of cash means the real outlay is $100M lower than the headline price.

Yes. EV adds all interest-bearing debt, both short-term and long-term, because an acquirer must repay or assume it. This is exactly why EV is a better basis than market capitalization for comparing companies with different levels of leverage.