EV to sales calculator
EV/sales is enterprise value over sales. On $100,000,000 of equity, $40,000,000 of debt and $10,000,000 of cash, EV is $130,000,000. Against $65,000,000 of sales that is 2 times. Debt sits in the numerator. P/S leaves it out.
EV / sales
2.00x
Enterprise value $130,000,000 over $65,000,000 of sales.
- Equity
- $100,000,000
- Net debt
- $30,000,000
- Enterprise value
- $130,000,000
- Sales
- $65,000,000
- EV / sales
- 2.00x
Figures on this page are in millions of dollars.
Revenue for the same period the multiple is quoting. Not EBITDA.
On this page
The formula
E is equity value, D interest-bearing debt, C surplus cash. The numerator is enterprise value. The denominator is sales, not EBITDA.
The EV identity, then a sales multiple
Enterprise value is equity plus debt minus cash. EV/sales divides that stock by a year's sales:
On $100,000,000 of equity, $40,000,000 of debt and $10,000,000 of cash, net debt is $30,000,000 and EV is $130,000,000. Against $65,000,000 of sales that is 2 times.
The calculator on this page is that multiple. How EV/sales works owns it. EV/EBITDA is the same EV over a different denominator. Do not paste those two into one gap.
More sales, the same EV
Keep EV at $130,000,000. Raise sales to $130,000,000. EV/sales falls to 1. The identity did not move. The year sold more.
A lower EV/sales here is a larger sales line, not a cheaper operations claim.
Take the cash out and the multiple rises
Zero the cash. EV becomes $140,000,000. Against $70,000,000 of sales that is 2 times again. Net debt is the full $40,000,000.
The 2.00 matched the first sheet on a different EV and a different sales line. EV/EBITDA against EV/sales is the two denominators.
What this page is not doing
It is not P/S, not EV/EBITDA, and not a full net-debt bridge. The three sheets are 2 times on $130,000,000 over $65,000,000, 1 times on $130,000,000 of sales, and 2 times on $140,000,000 over $70,000,000. This is educational material, not financial advice.
Worked examples
EV of 130 million over 65 million of sales
Equity is $100,000,000, debt $40,000,000, cash $10,000,000, sales $65,000,000. What is EV/sales?
- Net debt: , so $30,000,000.
- Enterprise value: , so $130,000,000.
- EV/sales: .
Enterprise value is $130,000,000. EV/sales is 2. Net debt is $30,000,000.
The same EV on 130 million of sales
Keep equity, debt and cash. Sales are now $130,000,000. What is EV/sales?
- Enterprise value is still $130,000,000.
- EV/sales: .
EV/sales falls to 1. Enterprise value is still $130,000,000.
No surplus cash, 70 million of sales
Equity $100,000,000, debt $40,000,000, cash $0, sales $70,000,000. What is EV/sales?
- Net debt is the full $40,000,000.
- Enterprise value: , so $140,000,000.
- EV/sales: .
Enterprise value is $140,000,000. EV/sales is 2. Net debt is $40,000,000.
The mistake that costs the most
Lining EV/sales up next to P/S and calling the gap a finding.
P/S is equity over sales. EV/sales has net debt in the numerator. On the first sheet P/S would need a market cap and a sales line from the same firm. This page's sales are $65,000,000 on a $100,000,000 equity claim, which is not the P/E teaching sheet.
The other error is using EBITDA in the denominator and still calling it EV/sales.
Common questions
Why not compare this 2 times to a P/S of 2?
Because the numerators differ by net debt, and because this sales line is not the P/E sheet's sales. A matched 2 is not a finding.
Where did the 13 times EV/EBITDA go?
It is still $130,000,000 of EV on the EV/EBITDA page, over a different denominator. This page does not take EBITDA.
Is 2 times sales cheap?
It is EV over sales on the teaching sheet. This is educational material, not financial advice.
Keep reading
This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.