— Business & Valuation
Equity Value Calculator
Calculate equity value from enterprise value or market capitalization. Bridge down from EV by subtracting net debt and senior claims, or use share price and diluted shares, then compare intrinsic and market equity value.
Equity value
$5,000
- Intrinsic value per share
- $50
- Net debt
- $1,500
- Market equity (price × shares)
- $5,000
- Market vs intrinsic
- 0%
- Enterprise value
- $6,500
Try: Bridge from EV, Market cap, Full claims bridge, Net-cash company
— The enterprise-value → equity-value bridge
| Component | Amount | Running total |
|---|---|---|
| Enterprise value | $6,500 | $6,500 |
| Net debt | $-1,500 | $5,000 |
| Equity value | $5,000 | $5,000 |
— From enterprise value to equity
Download— How it works
Equity value = Enterprise value − Net debt − Minority interest − Preferred + Investments in associates. Equity value (market) = Share price × Diluted shares. Net debt = Total debt − Cash.
The inverse of enterprise value
Enterprise value and equity value are two ends of the same bridge. Enterprise value is what it costs to buy the whole business — equity plus the net debt and other claims an acquirer assumes. Equity value strips those back out to leave what belongs to shareholders: start from enterprise value, subtract net debt (because the buyer takes on the debt and keeps the cash), subtract minority interest and preferred equity (claims that rank ahead of common shareholders), and add back investments in associates (stakes that aren’t part of the operating business but do belong to owners). What remains is the equity value. The calculator draws this as a waterfall stepping down from enterprise value — the mirror image of the enterprise-value chart, which steps up from equity.
Worked example — enterprise value 6,500, debt 2,000, cash 500: Net debt = 2,000 − 500 = 1,500. Equity value = 6,500 − 1,500 = 5,000. Over 100 shares, that’s 50 per share.
Intrinsic vs market — and why they differ
There are two routes to equity value and comparing them is the point. The bridge from enterprise value gives an intrinsic figure — what the equity is worth given a valuation of the whole business (say, from a DCF). The market route is simpler: share price times the diluted share count is the market capitalisation, which is equity value as the market sees it right now. When the two agree, the market and your valuation are aligned; when they diverge, the gap is a premium or discount worth understanding — the market may be pricing in growth or risk your bridge doesn’t, or the stock may be mis-priced. The calculator shows both and the percentage gap between them. For the share count, use diluted shares (the treasury-stock method adds the net new shares from in-the-money options), not just basic, or you’ll understate the market value.
Net debt, net cash, and the per-share figure
Net debt is the hinge of the bridge: total debt minus cash. When a company holds more cash than debt — net cash — the subtraction flips to an addition, and equity value rises above enterprise value, the opposite of the usual case. Dividing the equity value by the diluted share count gives the per-share value, which in the intrinsic route is your estimate of fair value per share to set against the market price. Educational tool only — not investment advice; the bridge is only as good as the enterprise value and the balance-sheet figures you feed it, and the market comparison reflects sentiment as much as fundamentals.
— Reader questions
What is the difference between equity value and enterprise value?
Enterprise value is the value of the whole business — what it costs to acquire, including the debt taken on and net of cash. Equity value is only the shareholders’ portion: enterprise value minus net debt and other senior claims (minority interest, preferred), plus investments in associates. Equity value equals market capitalisation for a listed company.
How do you calculate equity value from enterprise value?
Subtract net debt (total debt minus cash) from enterprise value, then subtract minority interest and preferred equity and add back investments in associates. The result is the value attributable to common shareholders. It’s the exact reverse of building enterprise value up from equity value.
Is equity value the same as market cap?
For a publicly-traded company, yes — market capitalisation (share price × diluted shares) is the market’s equity value. The “intrinsic” equity value bridged from enterprise value can differ from the market cap; the gap between them is a premium or discount, and comparing the two is a core use of this calculator.
Why is cash added back when finding equity value?
Because enterprise value already subtracted cash (an acquirer effectively gets it). To return from enterprise value to equity value you reverse that — net debt is debt minus cash, so subtracting net debt adds the cash back. A cash-rich company can have an equity value above its enterprise value (a net-cash position).
Should I use basic or diluted shares?
Diluted shares, for an accurate equity value per share and market cap. The treasury-stock method captures the net new shares created by in-the-money options and warrants (options minus the shares the company could buy back with the exercise proceeds), plus shares from convertibles. Using only basic shares understates the share count and overstates the per-share value.