HesapHanem

EV/Sales Multiple Calculator

Enter market cap, debt, cash and revenue to get the EV/Sales multiple.

How it is calculated

First the tool builds enterprise value: EV = market cap + debt − cash. Then EV/Sales = EV ÷ revenue. All four amounts must be in the same currency and for the same company; revenue is normally the trailing twelve months or the latest fiscal year. Market cap and revenue must be above zero, and debt and cash cannot be negative; if debt or cash is left blank it counts as 0. The result is a multiple shown to two decimals and EV is shown in dollars. If cash exceeds market cap plus debt, EV and the multiple come out negative, which the tool does not block. What counts as a high or low multiple depends on the industry and growth rate.

Worked example

Market cap 500,000,000, debt 80,000,000, cash 30,000,000, revenue 125,000,000. EV = 500,000,000 + 80,000,000 − 30,000,000 = $550,000,000.00. Multiple = 550,000,000 ÷ 125,000,000 = 4.40. The market values the whole business at 4.40 times its yearly sales.

Try this example →

Common mistakes

  • Adding cash instead of subtracting it. Cash reduces the price of buying the business, so it comes off the market cap.
  • Dividing market cap by revenue and calling it EV/Sales. That is price-to-sales; it ignores debt and cash.
  • Mixing periods or currencies, for example a quarterly revenue with an annual-sized market cap, which makes the multiple about four times too high.
  • Leaving debt blank for a leveraged company. A blank counts as 0 and understates EV.
  • Comparing multiples across different industries. A software firm and a retailer have very different normal ranges.

Sources

About this calculator

This calculator computes enterprise value (market cap + total debt − cash and equivalents) and divides it by revenue to get the EV/Sales multiple. Using enterprise value rather than market cap alone matters because EV represents the cost to acquire the whole business — including its debt — making it comparable across companies with very different capital structures.

Analysts reach for EV/Sales especially when valuing early-stage or high-growth companies that have revenue but no profit yet, since P/E and other earnings-based multiples are meaningless without positive earnings, and it's a common yardstick in SaaS and biotech valuations.

Was this helpful?

You can pick up to 3 reactions.

Comments (1)

  • Editorial team

    This tool counts only market cap, debt and cash, so items such as preferred shares, minority interests or lease obligations are not included; add them to debt yourself if your comparison set does. With a market cap of 5,000,000, debt of 1,500,000, cash of 500,000 and revenue of 2,500,000, EV is 6,000,000 and the multiple 2.40. Which sector's peers do you compare against?

Popular calculators

Loan Calculator

Monthly payment, total interest and full amortization schedule.

Percentage Calculator

Percent change, percent of, and ratio calculations.

Discount Calculator

Calculate final price, savings, and discount amount.

BMI Calculator

Body mass index from height and weight (metric or imperial).

Age Calculator

Compute your exact age in years, months and days from a birth date.

Compound Interest Calculator

Calculate the final amount and interest earned with compounding.

All Calculators