Enterprise Value (EV) Analysis

Enterprise Value (EV) represents the total value of a company’s operations — combining both equity and net debt. It is a critical measure in M&A, financial modelling, and corporate valuation because it reflects what acquirers would pay to take over the entire business.

📐 Enterprise Value Formula

Enterprise Value = Market Value of Equity + Net Debt

💰 Market Value of Equity = Share Price × Shares Outstanding

🏦 Net Debt = Interest-Bearing Debt – Cash & Cash Equivalents

EV is commonly compared against EBITDA to compute a valuation multiple:

📈 EV / EBITDA = Valuation Multiple

📚 Sources of EV/EBITDA Multiples

📄 Company disclosures and transactions
📊 Financial data providers (e.g. Capital IQ, Bloomberg)
🧾 Equity research reports
🔍 Peer company and industry benchmarking

🏢 Public vs 🏠 Private Company Valuation: Side-by-Side Comparison

🏢 Public Company	🏠 Private Company
Step 1: Market Cap + Net Debt = EV Step 2: EV / EBITDA = Multiple	Step 1: EBITDA × Discounted EV/EBITDA Multiple = EV Step 2: EV – Net Debt = Estimated Equity Value
Worked Example: Share Price = $10 Shares Outstanding = 5,000 Market Cap = $50,000 Net Debt = $30,000 EV = $80,000 EBITDA = $8,000 EV/EBITDA = 10x	Worked Example: Industry Multiple = 10x → Discounted = 8x EBITDA = $8,000 EV = $64,000 Net Debt = $30,000 Estimated Equity Value = $34,000

🏢 Public Company

🏠 Private Company

Step 1: Market Cap + Net Debt = EV
Step 2: EV / EBITDA = Multiple

Step 1: EBITDA × Discounted EV/EBITDA Multiple = EV
Step 2: EV – Net Debt = Estimated Equity Value

Worked Example:

Share Price = $10
Shares Outstanding = 5,000
Market Cap = $50,000
Net Debt = $30,000
EV = $80,000
EBITDA = $8,000
EV/EBITDA = 10x

Worked Example:

Industry Multiple = 10x → Discounted = 8x
EBITDA = $8,000
EV = $64,000
Net Debt = $30,000
Estimated Equity Value = $34,000

🧾 Market Value vs Book Value of Equity

💹 Market Value: Value if shares are sold in the market

📘 Book Value: Historical accounting value recorded on the balance sheet

🔼 Premium: Market > Book → Positive outlook

🔽 Discount: Market < Book → Negative outlook

🛠️ Valuation Tools

Finbox offers free access to EV/EBITDA multiples across industries and geographies.

It is widely used by private equity analysts and finance professionals to benchmark deal assumptions.

📎 Download the Visual Guide –> : Enterprise Value

🔗 Related Modules

Adjusted Working Capital (AWC) Analysis Debt Capacity Analysis DuPont Analysis

🏷️ Tags: #EnterpriseValue #EBITDA #EquityValue #Valuation #M&A #PrivateValuation #NetDebt #Finbox