How this calculator works
Bridge common equity value to the value attributable to all operating capital providers. Include preferred shares and non-controlling interests when relevant, then subtract cash. Market values are preferable where available. Debt-like lease or pension claims require a consistent policy across the companies compared.
Formula
EV = common market capitalization + debt + preferred equity + non-controlling interests - cash and cash equivalents.
Worked example
$1,000,000 common equity plus $400,000 debt, $100,000 preferred equity and $50,000 minority interest, less $150,000 cash, gives $1,400,000 EV. With $300,000 equity, no other claims and $400,000 cash, EV is -$100,000.
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Frequently asked questions
Can enterprise value be negative?
Yes. Cash can exceed the market value of the capital claims included in this simplified bridge.
Why add non-controlling interests?
Consolidated operating figures may include all of a subsidiary. Adding the outside ownership claim makes the numerator more consistent with those figures.
Is EV the same as equity value?
Equity value belongs to common shareholders. EV includes other financing claims and removes cash under the stated definition.