Published 2025-11-16 · Last updated 2026-01-08 · Reviewed by Valzura Editorial Team
Enterprise Value Calculator
See the total value of the business itself, independent of how it is financed.
Enterprise value (EV) is the total value of a business regardless of its capital structure. It equals equity value (or market capitalization) plus total debt, minus cash and cash equivalents. Enterprise value answers what it would cost to acquire the entire operating business, because an acquirer assumes the debt but keeps the cash. It is the numerator in the widely used EV-to-EBITDA multiple.
Market capitalization or the equity sale price.
Interest-bearing debt the buyer assumes.
Cash on the balance sheet, subtracted from EV.
Add EBITDA to see your EV to EBITDA multiple.
Enter an equity value or debt figure to calculate enterprise value.
The enterprise value formula
Enterprise value bridges from what shareholders own to what the whole operating business is worth. You add debt because an acquirer must repay or assume it, and you subtract cash because the buyer effectively gets it back. The result is capital-structure neutral, which is why it sits in the numerator of the widely quoted enterprise value multiples.
Why buyers think in enterprise value
Two businesses can report the same operating earnings yet command very different equity prices simply because one carries debt and the other holds cash. Enterprise value removes that distortion, letting a buyer compare targets on the value of the operations alone. When you pair it with EBITDA, you get the EV to EBITDA multiple, the single most cited yardstick in mergers and acquisitions.
Applying it to a private sale
In a small business sale, the headline price is usually quoted on a cash-free, debt-free basis, which is enterprise value in practice. The seller keeps the cash and clears the debt at closing, and the buyer pays for the operating business. To see the enterprise value your industry multiples imply for your actual earnings, run a full estimate with our free business valuation calculator.
Frequently Asked Questions
What is the difference between enterprise value and equity value?
Equity value is what belongs to shareholders, the market capitalization of a public company or the sale price of the stock. Enterprise value is the value of the whole operating business: it adds debt (which a buyer must repay) and subtracts cash (which a buyer effectively gets back). Enterprise value is capital-structure neutral, so it enables cleaner comparisons between companies.
Why do you subtract cash from enterprise value?
A buyer who acquires the business also acquires its cash, which they can use to pay down part of the purchase price. Netting out cash reflects the true cost of owning the operating business rather than its bank balance.
What is a good EV to EBITDA multiple?
EV-to-EBITDA multiples vary widely by industry, typically ranging from 3 to 6 times for many small businesses and higher for software or high-growth firms. Compare against transactions in your specific sector rather than a single benchmark, because risk, growth, and recurring revenue drive large differences.
Do small businesses use enterprise value?
Yes. While the term is common in public markets, the same logic applies to private sales. A buyer adjusts the headline price for the debt they assume and the cash they receive, which is exactly the enterprise value bridge from equity value.
Related Free Tools
Keep building your financial picture with these related calculators, or browse every free tool.
EBITDA Calculator
Calculate EBITDA and EBITDA margin, the earnings figure buyers multiply to value your company.
WACC Calculator
Compute your weighted average cost of capital from your capital structure and tax rate.
Profit Margin Calculator
Find net and operating profit margins from your revenue and cost figures.
What Is Your Business Worth?
Enterprise value depends on the multiple your industry commands. Run a full valuation to see yours.
Value My Business Free