Trading Comps, Multiple → EV → Equity Value

Values a company by trading comparables, applying the median peer EV/Revenue multiple to target revenue and netting out debt to reach equity value. Inputs are three peer multiples, the target company’s revenue, and net debt.

Interactive Tool

Peer A, EV/Revenue

Peer B, EV/Revenue

Peer C, EV/Revenue

Target company revenue

Net debt (negative = net cash)

Implied equity value

$45M

EV − net debt

Median multiple

8.0×

robust to one outlier

Mean multiple

8.0×

what one outlier drags

Enterprise value

$40M

median × target revenue

The market approach in one chain: peers → median multiple → enterprise value → equity value. Push one peer to an extreme and compare the median against the mean, comp selection, not arithmetic, is where the judgment lives.

Learn the concept

This calculator comes from the free Entrepreneurial Finance course, where the concept is taught with readings, worked examples, and practice questions.

Open Entrepreneurial Finance

Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.