Enterprise value bridge calculator
Walk from equity value to enterprise value the way you'd write it on the whiteboard — every line of the bridge itemized.
EV = equity value + debt + preferred + minority interest − cash
- Equity value (market cap)1,000
- +Total debt300
- +Preferred stock50
- +Minority interest25
- −Cash & equivalents(150)
Net debt: $150M
What enterprise value actually means
Enterprise value is the value of a company's core operations to all capital providers — equity holders, lenders, preferred holders, and minority shareholders. That's why you start from equity value and add every other claim on the business, then subtract cash: cash is a non-operating asset a buyer effectively gets back at close (it reduces the true purchase price). EV is what you pair with capital-structure-neutral metrics like EBITDA or unlevered FCF; equity value pairs with net income or EPS.
How to use this in an interview
- Recite the bridge in order, and be ready to justify each line: debt and preferred are claims that rank ahead of common equity; minority interest is added because consolidated EBITDA includes 100% of the subsidiary, so the numerator must match.
- Can EV be lower than equity value? Yes — when cash exceeds debt and the other claims (a net cash position). Try it above: set debt below cash and watch EV drop under market cap.
- Can EV be negative? Rarely — a company trading below its net cash, which usually signals the market expects the cash to be burned.
- Common follow-ups: Why subtract cash? Why EV/EBITDA instead of P/E for comparing companies with different leverage? What happens to EV when a company issues debt and holds the proceeds as cash (nothing — they offset)?
Knowing the formula isn't the same as saying it under pressure.
WACC Buddy drills the EV bridge — and every other IB technical — until the answers come out clean in the room. 1,500+ human-reviewed questions, spaced-repetition scheduled.
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