How this calculator works
Divide enterprise value by annual sales revenue to compare the operating business with its sales revenue base. Build EV from common equity, debt, preferred shares, non-controlling interests and cash, or enter it directly. Use consolidated figures consistently and match the valuation date and reporting period.
Formula
EV = common equity market value + debt + preferred equity + non-controlling interests - cash. EV / sales = EV divided by positive annual sales revenue.
Worked example
An EV of $1,500,000 and sales revenue of $300,000 give a multiple of 5. An EV of $2,000,000 and sales revenue of $500,000 give 4.
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Frequently asked questions
Why use enterprise value?
Sales revenue is measured before distributions to specific financing providers, so a total-capital valuation numerator is used.
Can I enter a negative denominator?
This comparison requires positive sales revenue. A negative denominator makes the conventional positive multiple hard to interpret.
What does this multiple leave out?
Sales do not measure profit or cash generation. Businesses with different margins can deserve very different sales multiples.