Unlike market cap alone, enterprise value reflects what it would actually cost to acquire a whole business — assuming its debt and netting out its cash.
How it works
Market capitalization plus total debt, minus cash and cash equivalents, gives enterprise value.
What this does not include
This uses a simplified debt and cash figure — a fuller calculation would also account for minority interest and preferred stock, additional balance-sheet items sometimes included in more detailed EV calculations.
How to use this calculator
- Enter market capitalization, total debt, and cash and cash equivalents.
A worked example
A company with $800,000 market cap, $400,000 total debt, and $100,000 cash: enterprise value = market cap + debt − cash = 800,000 + 400,000 − 100,000 = $1,100,000.
What the variables mean
| Variable | Meaning |
|---|---|
| Market cap | Total value of outstanding shares |
| Total debt | All interest-bearing debt |
| Cash | Cash and cash equivalents, subtracted since a buyer would effectively recoup it |
Edge cases worth knowing
Enterprise value represents the theoretical takeover cost, unlike market cap alone. A buyer would need to pay off the debt but could use the company’s own cash to help fund the deal, which is exactly why debt is added and cash subtracted.
A negative market cap has no real-world meaning, so the calculator declines to show a result for that input.
Frequently asked questions
Why add debt and subtract cash?
An acquirer would need to take on the target’s debt and could use its cash on hand to offset the purchase price — EV reflects that net economic cost, not just the equity price.
How is enterprise value used in valuation multiples?
EV is commonly divided by EBITDA or revenue to create valuation multiples that are comparable across companies with different capital structures, since EV isn’t affected by how much debt vs. equity a company uses.
Can enterprise value be negative?
Yes, if a company holds more cash than its market cap plus debt combined — unusual, but it happens, particularly for cash-rich companies with depressed share prices.
