Back to Finance

Equity Value vs Enterprise Value Bridge Calculator

Calculate the bridge between equity value and enterprise value by accounting for debt, cash, and other adjustments.

Equity Value vs Enterprise Value Bridge Calculator

Calculate the bridge between equity value and enterprise value by accounting for debt, cash, and other adjustments.

$
$
$
$
$

Related Calculators

Valuation and financial analysis

Free Cash Flow to Equity

Equity valuation.

Enterprise Value

Business valuation.

DCF Valuation

Discounted cash flow.

Guide

Understanding the equity value to enterprise value bridge

  • Enterprise Value (EV) = Equity Value + Net Debt + Adjustments. EV represents the total value of the business available to all investors.
  • Net Debt = Total Debt - Cash & Cash Equivalents. Cash reduces enterprise value because it can be used to pay down debt.
  • Adjustments include Minority Interests and Preferred Stock, which represent claims on the business that should be included in enterprise value.
  • Equity Value (Market Cap) = Share Price × Shares Outstanding. This represents the value available only to equity holders.
  • Enterprise Value is used in valuation multiples (EV/Revenue, EV/EBITDA) because it accounts for the capital structure and makes companies more comparable.

Frequently Asked Questions

Equity value, enterprise value, and valuation bridge

What is equity value?

Equity value (market capitalization) is the total value of a company's equity, calculated as Share Price × Shares Outstanding. It represents the value available to equity holders only.

What is enterprise value?

Enterprise value (EV) is the total value of a business available to all investors (equity and debt holders). EV = Equity Value + Net Debt + Adjustments (minority interests, preferred stock).

Why do we calculate enterprise value?

Enterprise value accounts for capital structure (debt, cash) and makes companies more comparable for valuation. It's used in EV/Revenue, EV/EBITDA multiples, which are capital-structure neutral.

What is net debt?

Net Debt = Total Debt - Cash & Cash Equivalents. Cash reduces enterprise value because it can be used to pay down debt, effectively reducing the cost of acquiring the business.

Why do we subtract cash from debt?

Cash can be used to pay down debt, so net debt (debt minus cash) represents the true debt burden. A company with $100M debt and $50M cash effectively has $50M net debt.

What are minority interests?

Minority interests represent the portion of subsidiaries owned by outside shareholders. They're added to enterprise value because they represent claims on the business that should be included in total value.

What is preferred stock?

Preferred stock is a hybrid security with characteristics of both debt and equity. It's added to enterprise value because it represents a claim on the business that should be included in total value.

Can enterprise value be less than equity value?

Yes. If a company has more cash than debt (negative net debt), enterprise value can be less than equity value. This is common for cash-rich companies with little or no debt.

How is enterprise value used in valuation?

Enterprise value is used in valuation multiples (EV/Revenue, EV/EBITDA, EV/EBIT) because these multiples are capital-structure neutral, making companies with different debt levels more comparable.

What is the difference between market cap and enterprise value?

Market cap (equity value) represents value available to equity holders only. Enterprise value represents total business value available to all investors (equity + debt holders), accounting for capital structure.

Embed This Calculator

Add this calculator to your website or blog using the embed code below:

<div style="max-width: 600px; margin: 0 auto;"> <iframe src="https://mycalculating.com/category/finance/equity-enterprise-value-bridge-calculator?embed=true" width="100%" height="600" style="border:1px solid #ccc; border-radius:8px;" loading="lazy" title="Equity Enterprise Value Bridge Calculator Calculator by MyCalculating.com" ></iframe> <p style="text-align:center; font-size:12px; margin-top:4px;"> <a href="https://mycalculating.com/category/finance/equity-enterprise-value-bridge-calculator" target="_blank" rel="noopener"> Use full version on <strong>MyCalculating.com</strong> </a> </p> </div>
Open in New Tab

Equity Value vs Enterprise Value Bridge Calculator

Calculate the bridge between equity value and enterprise value by accounting for debt, cash, and other adjustments.

How to use Equity Value vs Enterprise Value Bridge Calculator

Step-by-step guide to using the Equity Value vs Enterprise Value Bridge Calculator:

  1. Enter your values. Input the required values in the calculator form
  2. Calculate. The calculator will automatically compute and display your results
  3. Review results. Review the calculated results and any additional information provided

Frequently asked questions

How do I use the Equity Value vs Enterprise Value Bridge Calculator?

Simply enter your values in the input fields and the calculator will automatically compute the results. The Equity Value vs Enterprise Value Bridge Calculator is designed to be user-friendly and provide instant calculations.

Is the Equity Value vs Enterprise Value Bridge Calculator free to use?

Yes, the Equity Value vs Enterprise Value Bridge Calculator is completely free to use. No registration or payment is required.

Can I use this calculator on mobile devices?

Yes, the Equity Value vs Enterprise Value Bridge Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.

Are the results from Equity Value vs Enterprise Value Bridge Calculator accurate?

Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.