Is this calculator free?

Yes. This calculator is free to use, and you do not need to register or provide an email address to see your result. Contact details are requested only if you choose to receive a summary report or request a confidential review.

Is this a formal business valuation?

No. The result is an indicative calculation based on the information and assumptions entered. It is not suitable for HMRC, court, EOT, EMI, lending, probate, matrimonial, shareholder-dispute or other formal purposes.

What will I receive after debt is deducted from a business sale?

Broadly, enterprise value plus surplus cash, less debt and debt-like items, plus or minus any working capital adjustment. The calculator then separates cash at completion from deferred and conditional amounts. Personal tax and fees are not deducted.

What is the difference between enterprise value and equity value?

Enterprise value is the value of the trading business regardless of how it is financed. Equity value is what shareholders receive after adding surplus cash and deducting debt, debt-like items, working-capital adjustments and transaction costs.

Does the seller always keep all cash in the company?

No. Buyers expect a normal level of working capital to be left in the business. Only genuinely surplus cash above that level is usually added to the price.

What counts as debt-like?

Items that behave like borrowing even if they are not labelled as such: finance leases, hire purchase, overdrafts, unpaid tax, deferred consideration owed on past deals, dividends declared but unpaid, and accrued bonuses.

What is a normal level of working capital?

Usually an average of the last 12 months, adjusted for seasonality. Any shortfall against that level is deducted from the price on completion.

Is deferred consideration guaranteed?

Fixed deferred consideration is contractually due but still carries counterparty risk. Security, interest and set-off rights against warranty claims all matter.

How should earn-out consideration be treated?

Treat it as conditional. It depends on post-completion performance you may no longer fully control, so model the outcome without it as well as with it.

Does this calculation include personal tax?

No. The result is labelled indicative pre-tax proceeds before personal tax. Take specific advice on Capital Gains Tax and reliefs before agreeing terms.

Free calculator

Transaction

Free Enterprise Value to Equity Value Calculator

What would I actually receive from a business sale?

Cost: Free
Sign-up: Not required
Result: Immediate
Report: Optional
Status: Indicative only

In short

Enterprise value is the price for the business. Equity value is what shareholders receive, which is enterprise value less debt-like items, plus cash-like items, adjusted for any working-capital true-up. On a cash-free debt-free basis the seller keeps surplus cash and settles borrowings, so the headline offer is rarely the amount that reaches you.

A headline offer is rarely the money that reaches your bank account. This calculator works the equity bridge and then shows how the proposed structure splits the consideration.

Part of the business valuation calculators suite from BusinessValuation.co.uk. Your result is saved in this browser, so you can compare it with your other calculator results.

How to use this calculator

Start with the headline enterprise value, then enter the cash, debt, debt-like items and working-capital adjustments that affect equity value. Finally, show how the buyer proposes to divide the consideration between completion cash, deferred amounts, earn-out and retained equity.

Headline value on the table, before adjustments.

Enterprise value offered

£4,000,000

Your ownership of the business

Cash in the business

£250,000

Bank and other interest-bearing debt

£400,000

Hire purchase and finance leases

£120,000

Director loans owed to the company

Treated as cash-like.

£0

Director loans due to directors

Treated as debt-like.

£60,000

Working capital adjustment

Negative if you expect to hand back working capital.

-£100,000

Deferred consideration

Paid later on agreed dates.

Earn-out

Dependent on future performance.

Estimated transaction fees

Corporate finance, legal and accounting.

£120,000

This calculator does not estimate tax. Capital gains tax, Business Asset Disposal Relief and your wider position all affect what you keep. Take specialist tax advice on your own circumstances before making decisions.

What you would actually receive

Cash at completion, after fees

£2,557,500

Enterprise value offered: £4,000,000
Less debt-like items: -£580,000
Add cash-like items: £250,000
Working capital adjustment: -£100,000
Equity value for 100 per cent: £3,570,000
Your share (100%): £3,570,000
Cash at completion before fees: £2,677,500
Less transaction fees: -£120,000
Cash at completion after fees: £2,557,500
Deferred consideration: £535,500
Earn-out, at risk: £357,000

Certain against at risk

Cash at completion£2,557,500
Deferred£535,500
Earn-out£357,000
Fees£120,000

71.6% of your equity value would be certain cash at completion on these assumptions.

Before you rely on this

Enterprise value is not the same as shareholder proceeds.
Deferred and earn-out consideration may never be received in full. Only completion cash is certain.
Personal tax is excluded. Capital Gains Tax and Business Asset Disposal Relief are not calculated here.

Indicative estimate only

Your result is an indicative estimate based on the information you provided. It is not a formal valuation or a guaranteed sale price. Unless stated otherwise, it assumes a sale of 100% of the business on a cash-free, debt-free basis with normal working capital. The price ultimately achieved will depend heavily on the sale process, buyer interest, due diligence, deal terms, market conditions and the experience of any adviser used.

Next steps

Your result is above and stays visible. If it would help, we can send it to you or review it with you confidentially.

Would you like an experienced adviser to review your result?

A calculator provides a useful starting point. A confidential discussion with an experienced business valuation adviser can help you test the assumptions, understand what buyers may pay and decide whether a formal valuation is needed.

Discuss my valuation with an adviser Request a confidential valuation review

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Enter the figures from your accounts to see an immediate indicative enterprise and equity value range. Free, with no sign-up to see your result, and an optional six-page Indicative Business Value Summary.

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Important information

This calculator provides general, indicative guidance based solely on the information entered. It is not a formal business valuation, tax calculation, legal opinion or recommendation to accept or reject an offer. Actual value and sale proceeds depend on detailed financial, commercial and transaction-specific factors.

How this calculation works

Equity value = enterprise value − debt-like items + cash-like items ± working-capital adjustment
Cash at completion = equity value − deferred consideration − earn-out − retentions
Certain proceeds % = cash at completion ÷ headline enterprise value

Worked example: £4m headline offer

Worked example: £4m headline offer
Headline enterprise value	£4,000,000
Bank debt and asset finance	−£650,000
Corporation tax and other debt-like items	−£120,000
Surplus cash retained by shareholders	+£300,000
Working-capital adjustment below the target	−£90,000
Equity value	£3,440,000
Deferred consideration and earn-out	−£700,000
Cash at completion	£2,740,000

The £4m headline becomes £3.44m of equity value and £2.74m of certain cash on completion, before any tax. That is 69% of the headline, which is why the equity bridge matters more than the multiple in most negotiations.

What each input means

Enterprise value: The headline price for the business, usually quoted cash-free and debt-free.
Debt-like items: Bank loans, asset finance, overdrafts, unpaid tax, deferred and pension liabilities, dividends declared and unpaid, and any other obligation a buyer treats as debt.
Cash-like items: Surplus cash and equivalents not needed to run the business day to day.
Working-capital adjustment: The difference between actual completion working capital and the agreed normal level, which can be positive or negative.
Deferred consideration, earn-out and retentions: Amounts paid after completion, or held back, which are not certain money on the day.

How to read the result

The result shows pre-tax shareholder proceeds and how much of the headline is certain on completion day. Compare the certain portion with the headline before judging whether one offer beats another.

What can materially change the result

Which items the buyer defines as debt-like: this is negotiated, not fixed.
The working-capital target and how it is measured.
Whether surplus cash is genuinely surplus once seasonality is considered.
The split between completion cash, fixed deferred consideration and earn-out.
Escrow, retention and warranty caps.
Transaction costs and personal tax, neither of which is calculated here.

Limitations

It does not calculate capital gains tax or any other personal tax.
It does not value the business; the enterprise value is the figure you supply.
It does not test whether the buyer's definitions of debt-like or working capital are reasonable.
It does not apportion proceeds between multiple shareholders or share classes.

When this calculator is appropriate

Use it when you have an offer, or an expected value, and need to see the pre-tax cash that would actually reach shareholders.

When it is not appropriate

Do not use it to agree completion mechanics. Those depend on the drafted definitions in the sale and purchase agreement.

Bottom line

Enterprise value is the price of the business; equity value is your money. The gap between them is created by debt, cash, working capital and deal structure.

Questions owners ask

Is this calculator free?: Yes. This calculator is free to use, and you do not need to register or provide an email address to see your result. Contact details are requested only if you choose to receive a summary report or request a confidential review.
Is this a formal business valuation?: No. The result is an indicative calculation based on the information and assumptions entered. It is not suitable for HMRC, court, EOT, EMI, lending, probate, matrimonial, shareholder-dispute or other formal purposes.
What will I receive after debt is deducted from a business sale?: Broadly, enterprise value plus surplus cash, less debt and debt-like items, plus or minus any working capital adjustment. The calculator then separates cash at completion from deferred and conditional amounts. Personal tax and fees are not deducted.
What is the difference between enterprise value and equity value?: Enterprise value is the value of the trading business regardless of how it is financed. Equity value is what shareholders receive after adding surplus cash and deducting debt, debt-like items, working-capital adjustments and transaction costs.
Does the seller always keep all cash in the company?: No. Buyers expect a normal level of working capital to be left in the business. Only genuinely surplus cash above that level is usually added to the price.
What counts as debt-like?: Items that behave like borrowing even if they are not labelled as such: finance leases, hire purchase, overdrafts, unpaid tax, deferred consideration owed on past deals, dividends declared but unpaid, and accrued bonuses.
What is a normal level of working capital?: Usually an average of the last 12 months, adjusted for seasonality. Any shortfall against that level is deducted from the price on completion.
Is deferred consideration guaranteed?: Fixed deferred consideration is contractually due but still carries counterparty risk. Security, interest and set-off rights against warranty claims all matter.
How should earn-out consideration be treated?: Treat it as conditional. It depends on post-completion performance you may no longer fully control, so model the outcome without it as well as with it.
Does this calculation include personal tax?: No. The result is labelled indicative pre-tax proceeds before personal tax. Take specific advice on Capital Gains Tax and reliefs before agreeing terms.

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Adjusted EBITDA Calculator
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