--- title: Enterprise Value vs Equity Value Explained | Assetica description: Enterprise value minus net debt equals equity value, the number that decides what a seller actually gets paid at completion. url: https://assetica.net/blog/enterprise-value-vs-equity-value/ source: Assetica, independent business valuation firm, Dubai and the UK --- # Enterprise Value vs Equity Value: The Difference That Decides What You Actually Get Paid By **Bill Anderson**, FCCA, Chief Executive Officer, Assetica — 2026-07-29 ![Enterprise Value vs Equity Value: The Difference That Decides What You Actually Get Paid — Assetica, independent business valuation, Dubai](https://images.unsplash.com/photo-1518186285589-2f7649de83e0?auto=format&fit=crop&w=1100&q=65) Direct Answer: Enterprise value minus net debt equals equity value, the number that decides what a seller actually gets paid at completion. Enterprise value minus net debt equals equity value, the number that decides what a seller actually gets paid at completion. ## Enterprise value is the price of the operations Enterprise value is what it would cost to buy the whole operating business debt-free and cash-free, independent of how it happens to be financed. It is the figure EV/EBITDA and EV/Revenue multiples price, and it is almost always the headline number quoted in a term sheet or a press release about a deal. ## Equity value is what the shareholder actually receives Equity value is what is left for the ordinary shareholders once every lender, minority interest and preferred claim is settled. For a listed company it is market capitalisation; for a private UAE or UK business it is the figure a certified valuation report certifies, and it is the number that matters for a Golden Visa threshold, a shareholder buyout or a sale. ## The bridge: debt out, cash in Equity Value equals Enterprise Value minus total debt and debt-like items, minus minority interests and preferred equity, plus cash and cash equivalents genuinely surplus to the business. Debt-like items go beyond bank loans to include IFRS 16 lease liabilities, deferred consideration, unfunded end-of-service gratuity provisions and overdue supplier balances. ## Which multiples price which value EV/EBITDA and EV/Revenue price enterprise value, because EBITDA and revenue are unaffected by capital structure. Price/Earnings, dividend yield and Price/Book price equity value, because profit and dividends are calculated after financing costs. Applying an enterprise-value multiple directly to equity value, or vice versa, misstates the answer by the amount of net debt. ## Debt-free, cash-free, and the working capital peg Most M&A term sheets quote enterprise value on a debt-free, cash-free basis: the seller separately clears the debt and keeps the cash at completion. A working capital target, or peg, is agreed in advance, and the price adjusts for any shortfall or surplus against it, which is where most post-completion disputes actually arise. ## Frequently Asked Questions What is the simplest way to remember the difference between enterprise value and equity value? Enterprise value is the value of the business as a whole, including the claims of lenders and other stakeholders. Equity value is what is left over for the shareholders once those claims are settled. Enterprise value answers what the operation costs to buy; equity value answers what the shareholder actually receives. Is enterprise value always higher than equity value? Not always. If a company holds more cash than debt, its net debt is negative and equity value can exceed enterprise value, which is common for cash-rich technology and professional services businesses with little or no borrowing. Which figure does a UAE Golden Visa business valuation use? Equity value, specifically the value attributable to the applicant's own shareholding net of debt, must meet the AED 2 million threshold. A report stating only the company's enterprise value will not satisfy the GDRFA or ICP. What counts as a debt-like item beyond bank loans? Finance lease liabilities under IFRS 16, deferred and contingent consideration from a prior acquisition, unfunded end-of-service gratuity provisions, shareholder loans, overdue supplier balances beyond normal terms, and pension or gratuity deficits are all commonly treated as debt-like when bridging to equity value. How does working capital affect the equity value a seller receives? Buyers agree a working capital target, or peg, representing a normal operating level of stock, receivables and payables. If working capital delivered at completion is below that peg the price is reduced; if above, the price increases. This adjustment sits inside the enterprise-to-equity bridge alongside net debt. Can I calculate my own enterprise-to-equity bridge, or do I need a professional valuation? For internal planning a rough calculation from your latest balance sheet is a reasonable start. For a transaction, a Golden Visa application or a shareholder buyout, you need an independent valuation that documents the methodology and itemises every adjustment, because a self-prepared figure carries no evidential weight. ## Speak to Assetica about Business Valuation Assetica is an independent business valuation firm in Dubai. We do not audit and we do not broker deals, so the number carries no conflict. Read more about [business valuation](https://assetica.net/services/business-valuation/), or [book a free scoping call](https://assetica.net/contact/). Standard reports are issued in five to seven business days. ## Related Guides - [Business Valuation Methods Explained: DCF, Market Multiples and Asset-Based](https://assetica.net/blog/business-valuation-methods-explained/) - [How to Sell a Business in Dubai: The Complete 2026 Guide to Valuation, Process and Maximising Your Sale Price](https://assetica.net/blog/how-to-sell-a-business-in-dubai/) - [UAE Business Valuation Multiples by Industry in 2026: A Market Reference Guide](https://assetica.net/blog/uae-business-valuation-multiples-2026/) ## Independent business valuation across the UAE, UK and Europe ### Valuation services - [Business valuation Dubai](https://assetica.net/services/business-valuation/) - [Golden Visa business valuation](https://assetica.net/golden-visa-valuation/) - [UAE corporate tax valuation](https://assetica.net/corporate-tax-valuation/) - [M&A and transaction valuation](https://assetica.net/ma-transaction-valuation/) - [Financial due diligence](https://assetica.net/financial-due-diligence/) - [Succession planning valuation](https://assetica.net/succession-valuation-uae/) - [Family office valuation](https://assetica.net/family-office-valuation/) - [Feasibility study Dubai](https://assetica.net/feasibility-study-dubai/) - [All advisory services](https://assetica.net/services/) ### Where we work - [Abu Dhabi](https://assetica.net/abu-dhabi-business-valuation/) - [Sharjah](https://assetica.net/sharjah-business-valuation/) - [Ras Al Khaimah](https://assetica.net/ras-al-khaimah-business-valuation/) - [DIFC](https://assetica.net/difc-business-valuation/) - [ADGM](https://assetica.net/adgm-business-valuation/) - [United Kingdom](https://assetica.net/uk-business-valuation/) - [Europe](https://assetica.net/europe-business-valuation/) - [South Africa](https://assetica.net/south-africa-business-valuation/) - [Australia](https://assetica.net/australia-business-valuation/) ### Resources - [How much is my business worth?](https://assetica.net/how-much-is-my-business-worth-dubai/) - [Free business valuation calculator](https://assetica.net/business-valuation-calculator/) - [Startup and technology valuation](https://assetica.net/startup-technology-valuation/) - [UAE valuation facts and figures](https://assetica.net/uae-business-valuation-facts/) - [Valuation insights and guides](https://assetica.net/blog/) - [Latest insights](https://assetica.net/insights/) - [Industries we value](https://assetica.net/industries/) - [For lawyers and accountants](https://assetica.net/for-advisors/) ### About Assetica - [Business valuation Dubai and UAE](https://assetica.net/) - [About Assetica](https://assetica.net/about/) - [Bill Anderson, FCCA, CEO](https://assetica.net/team/bill-anderson/) - [Contact us](https://assetica.net/contact/) ### Browse by topic - [Business valuation articles](https://assetica.net/blog/category/business-valuation/) - [Selling a business](https://assetica.net/blog/category/business-sale/) - [Strategic value advisory](https://assetica.net/blog/category/strategic-advisory/) - [Financial reporting valuation](https://assetica.net/blog/category/financial-valuation/) - [Valuation risk management](https://assetica.net/blog/category/risk-management/) - [Pitch decks and fundraising](https://assetica.net/blog/category/pitch-deck/) - [Cross-border relocation](https://assetica.net/blog/category/cross-border/) - [Golden Visa valuation](https://assetica.net/blog/category/golden-visa/) - [UK valuation](https://assetica.net/blog/category/uk-valuation/) - [UK tax](https://assetica.net/blog/category/uk-tax/) Assetica, Office 304, Icon Tower, Barsha Heights (Tecom), Dubai, UAE. Telephone and WhatsApp [+971 52 979 8302](tel:+971529798302). Email [info@assetica.net](mailto:info@assetica.net).