Business valuation calculators
What Would I Actually Receive from a Business Sale?
Enterprise Value to Equity Value Calculator
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.
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.
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.
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
| 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
- 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.
Related reading
Free business valuation
We build the equity bridge with you and show what the structure means in cash terms before you respond to a buyer.
Where owners usually go next
- Offer Sense-Check Calculator
Test the implied multiple behind the headline figure.
- Exit Number Calculator
Check the proceeds against the capital you personally need.
Written and reviewed by Tony Vaughan, founder and lead adviser, BusinessValuation.co.uk.·Last reviewed: September 2026·How we produce these figures
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