Valuation Updated November 2026

Enterprise value to equity value

Equity value = enterprise value - debt + cash - preferred stock - non-controlling interest (plus investments in associates, if any). Enterprise value is the value of the operating business to all capital providers; equity value is what is left for shareholders after the claims that rank ahead of them.

Syntax

Equity value = EV - debt + cash - preferred - minority interest;  per share = equity value / diluted shares

Part	What it is
`EV`	Enterprise value, for example from a DCF or an EV/EBITDA multiple
`debt`	All interest-bearing debt, including leases where treated as debt
`cash`	Cash and cash equivalents (net debt = debt - cash)
`diluted shares`	Shares outstanding plus in-the-money options and convertibles

Examples

EV 1,000, debt 400, cash 100
=1000 - 400 + 100

Result: 700

EV 2,000, debt 600, cash 150, preferred 50, minority interest 30
=2000 - 600 + 150 - 50 - 30

Result: 1,470

Per share with 70 shares: 1,470 / 70 = 21.00.

Reverse: market cap 900, debt 300, cash 120
=900 + 300 - 120

Result: EV = 1,080

Common mistakes

Subtracting cash instead of adding it: cash reduces net debt, so it increases equity value.
Using basic shares for the per share value: use diluted shares via the treasury stock method.
Forgetting preferred stock and minority interest, which rank ahead of common equity and must be subtracted.

Practice Enterprise value to equity value

These drills check your answer on live data, free, no account needed.

Enterprise value to equity valueFor three valuation cases, bridge from enterprise value to equity value (row 10: less debt, plus cash, less minority interest), then value per share (row 11) and the upside against the current price (row 12).

Questions

Can equity value be higher than enterprise value?

Yes, when cash exceeds debt (net cash). Then EV = equity value - net cash, which is lower than equity value.

Why subtract minority interest?

Consolidated EBITDA includes 100% of subsidiaries, so EV reflects 100%. The share owned by outside investors is not the parent's, so it is removed on the way to equity value.

DCF model stepsThe six steps of a DCF: forecast unlevered free cash flow, set WACC, compute terminal value, discount it all, bridge to equity value and divide by shares.
Exit multipleThe exit multiple method sets terminal value as final year EBITDA times a market multiple. Worked example, present value at WACC and the implied growth check.
Terminal valueTerminal value captures all cash flows after the forecast period. Perpetuity growth and exit multiple formulas with examples, and how to discount it right.
WACCWACC = E/V x cost of equity + D/V x cost of debt x (1 - tax rate). Cost of equity from CAPM, market value weights, an example giving 9.0% and common errors.