Enterprise Value Calculator
Calculate the enterprise value of a company using our online calculator. By inputting key financial parameters such as market capitalization, total debt, cash and cash equivalents, and minority interest, you can determine the estimated value of the entire business. T
What is Enterprise Value?
Enterprise Value (EV) reflects the total value of an organization. The EV calculation is based on the entire market value as opposed to just the equity value; as such, it takes into consideration all asset claims and ownership interests from both debt and equity perspectives. EV can be perceived to be the theoretical cost of a target organization or the effective cost of buying it.
EV represents a useful metric for financial and strategic buyers because it can be employed to value, compare, and benchmark organizations of a range of different sizes across multiple industries.
The Enterprise Value Formula
The basic formula that is used to determine enterprise value is as follows:
EV = CS + PS + MVD + MI – CE
Where:
EV is enterprise value, CS is the market value of common shares (market capitalization), PS is the market value of preferred shares, MVD is the market value of debt, MI is minority interest, and CE is cash and cash equivalents.
An Example of an Enterprise Value Calculation
Let's say that an organization has the following:
A market capitalization of $800,000, market value of preferred shares of $400,000, debt value of $600,000, minority interest of $200,000, and cash and investments of $100,000.
Enterprise Value (EV) = $800,000 + $400,000 + $600,000 + $200,000 – $100,000 = $1,900,000
According to the enterprise value calculation, the organization has an enterprise value of $1,900,000.
