Free · Business valuation and cash flow

Enterprise Value & EV-to-Sales Multiple

Combine equity value, debt, preferred equity, noncontrolling interests and cash to calculate enterprise value and its sales multiple.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Market capitalization of 1,000 plus debt of 300 minus cash of 100 gives enterprise value of 1,200. With sales of 600, EV-to-sales is 2.

EV = market cap + debt + preferred equity + noncontrolling interests − cash; EV-to-sales = EV ÷ sales

Worked example

Enter these known values and leave the other values blank.

Equity market capitalization
1000 USD
Debt value included in EV
300 USD
Cash and cash equivalents
100 USD
Sales for the chosen period
600 USD
Enterprise value
1200 USD
Enterprise value / sales
2

Assumptions and limitations

  • Sales must be positive. Enterprise value and its multiple may be zero or negative when cash offsets the included claims.
  • Use consistent valuation dates, monetary scale and currency. Sales usually cover a specified annual or trailing period; this calculator does not annualize them.
  • Preferred equity and noncontrolling interests default to zero. Enter them when applicable and avoid double-counting claims already included elsewhere.
  • This simplified EV bridge includes only the listed adjustments. It does not fetch market prices or account for every possible lease, pension or investment adjustment.

Common questions

Can enterprise value be negative?

Yes. Entered cash can exceed the sum of the included equity and debt claims. Interpretation requires more information.

Is a smaller multiple always better?

No. Different margins, risk, growth and accounting make a universal cutoff unreliable.

References

Require positive sales as the denominator and allow negative enterprise-value multiples when cash exceeds the included claims.

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