i What this calculator does
Enterprise value is what it would cost to buy the whole business: the equity plus the debt you inherit, less the cash that comes with it. It is the price of the operations rather than the price of the shares.
The reason it matters is comparison. Two companies with identical operations and different debt loads have different market capitalisations but similar enterprise values, which is why EV/EBITDA travels better across companies than the P/E does.
This calculator is for educational purposes only. Results are estimates and may vary depending on market conditions, spreads, commissions, platform settings, and exchange rates. It should not be considered financial advice.
How to use the Enterprise Value Calculator
Every field has a working default, so the calculator produces a result the moment the page loads. Replace the defaults with your own figures and the output updates when you press the button.
- 1. Share Price (R)
- 2. Shares in Issue (million)
- 3. Total Debt (R million)
- 4. Cash and Equivalents (R million)
- 5. Minority Interests (R million)
- 6. EBITDA (R million)
The result panel reports:
- Enterprise Value Cost of the whole business
- EV / EBITDA The comparable multiple
Alongside the headline figures, the calculator reports market capitalisation, total debt, cash, net debt to market cap. Those are the numbers that usually explain why the headline result came out where it did.
The breakdown below the result shows every step of the arithmetic, so you can check the figure rather than trust it. The formula panel names each input as it is used, which is useful if you want to reproduce the calculation in a spreadsheet.
Frequently asked questions
Why not just use market capitalisation?
Because it ignores debt. A company worth R100 million in equity with R200 million of debt costs a buyer R300 million, not R100 million. Market cap prices the shares; enterprise value prices the business.
Why subtract cash?
Because a buyer acquiring the company also acquires the cash, which offsets part of the purchase price. Cash on the balance sheet effectively reduces what the operations cost.
What is a normal EV/EBITDA?
It varies by sector and cycle. Six to ten times is common for mature industrials, lower for cyclical resource businesses and higher for companies with recurring revenue. As with the P/E, the comparison that matters is against the sector and the company's own history.
Why include minority interests?
Because the consolidated EBITDA includes the full earnings of partly owned subsidiaries, while the market capitalisation only reflects the parent's shareholders. Adding minorities makes the numerator and denominator consistent.
Is EV/EBITDA better than the P/E?
For comparing companies with different debt levels and tax positions, yes. EBITDA sits above interest and tax, so it is closer to a like-for-like operating figure. It also ignores the capital a business must spend, which is its main weakness.
Where do I find these figures?
The balance sheet in the annual or interim report gives debt, cash and minorities. EBITDA is usually disclosed directly in JSE results announcements, or can be built from operating profit plus depreciation and amortisation.
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