Definition
Enterprise value (EV) represents the value of the operating business available to all capital providers (debt and equity). DCF models that discount unlevered free cash flows typically produce EV.
How to use it
- EV is often bridged to equity value by adjusting for net debt and other claims.
- EV multiples (EV/Revenue, EV/EBITDA) are not the same as equity multiples (P/E).
Measured as
Measure Enterprise Value (EV) with the same date, unit basis, and accounting or policy definitions used in the rest of your model.
Operator takeaway
- EV is often bridged to equity value by adjusting for net debt and other claims.
- EV multiples (EV/Revenue, EV/EBITDA) are not the same as equity multiples (P/E).
- Tie Enterprise Value (EV) to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
- Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.
Next decision
- Quantify the impact with Equity Value Calculator if you need to turn the definition into an operating assumption.
- Read Equity value explained: EV to equity bridge, net debt, and adjustments if the decision depends on interpretation, policy, or trade-offs beyond the raw formula.
Where to use this on MetricKit
Calculators
- Equity Value Calculator: Convert enterprise value (EV) into equity value using cash, debt, and other adjustments (optionally per share).
- DCF Valuation Calculator: Estimate enterprise value using a simple DCF: forecast cash flows, apply a discount rate (often WACC), and add a terminal value.
- Multiple Valuation Calculator: Estimate enterprise value and equity value from a metric (ARR or revenue) and a valuation multiple (with net debt adjustments).
Guides
- Equity value explained: EV to equity bridge, net debt, and adjustments: Use this guide to move from enterprise value to what belongs to shareholders. Learn the EV-to-equity bridge, which claims and adjustments matter, and how to avoid date mismatches or double-counting.
- DCF valuation: forecast cash flows, discount rate, and terminal value: A practical guide to DCF valuation and WACC discount rate choices: how to forecast FCF, choose a discount rate, and avoid terminal value traps.
- Multiple valuation: how to use ARR/revenue multiples and avoid mix-ups: A practical guide to multiple-based valuation: choosing a metric, applying EV multiples, and bridging to equity value via net debt.
- Fundraising & valuation hub: pre/post-money, SAFEs, notes, and liquidation prefs: A practical hub for startup fundraising and valuation basics: pre/post-money, pro rata, option pool shuffle, SAFE/note conversion, and liquidation preference outcomes.
- Valuation modeling hub: WACC, DCF, multiples, and equity value: A practical hub for valuation modeling: estimate a discount rate (WACC), run a simple DCF with sensitivity analysis, and translate enterprise value to equity value.