EV/Sales Calculator — Enterprise Value to Revenue Ratio
Compute the EV/Sales ratio — the enterprise value divided by annual revenue — the most commonly used revenue-based valuation multiple for comparing companies across capital structures.
Enterprise value divided by annual revenue
EV 550
EV componentsMarket Cap
82%
Total Debt
13.1%
Cash (reduces EV)
4.9%
- 1
Enterprise Value (EV)
500 + 80 − 30 = 550Market cap plus debt minus cash — the capital-structure-neutral cost of the business. - 2
EV / Sales
550 ÷ 200 = 2.75
How does this calculator work?
EV = Market Cap + Debt − Cash. EV/Sales = EV ÷ Annual Revenue. The multiple is capital-structure-neutral, making cross-company comparisons fairer than Price/Sales. Typical ranges: 1–3× (traditional industries), 3–8× (growth), >8× (high-growth). Compare only within the same sector.
Formula
How this is calculated
Enterprise value (EV) measures the total cost of acquiring a company: it equals the market capitalisation (equity value) plus all interest-bearing debt, minus cash and cash equivalents. Adding debt captures what a buyer would assume, and subtracting cash reflects the net cost after using that cash to repay debt.
Dividing EV by annual revenue gives the EV/Sales multiple (also written EV/Revenue). Unlike the Price/Sales (P/S) ratio — which divides market cap by revenue — EV/Sales is capital-structure-neutral: two companies with identical operations but different debt levels produce similar EV/Sales multiples, making cross-company comparisons fairer.
Typical EV/Sales ranges vary widely by sector (figures are indicative for 2023–2025): mature industrials and consumer staples trade at 1–3×; healthcare 2–5×; technology growth stocks 5–15×; pre-revenue or high-growth companies sometimes exceed 20×. Because EV/Sales ignores profitability, it is most useful alongside other multiples (EV/EBITDA, P/E) and should be compared to peers in the same industry.
Frequently asked questions
P/S only divides market cap by revenue, ignoring debt and cash. EV/Sales includes both, so two companies with the same operations but different capital structures (one debt-heavy, one cash-rich) show similar EV/Sales but very different P/S. This makes EV/Sales a fairer basis for comparison.
There is no universal answer — benchmarks vary by sector, growth rate and profitability. As a rough guide: < 1× can signal deep value or distress; 1–3× is typical for traditional industries; 3–8× reflects a growth premium; > 8× is common for high-growth tech or pre-profit companies. Always compare to sector peers.
Debt includes short-term borrowings, current portion of long-term debt, and all long-term debt. Cash typically includes cash, bank deposits and highly liquid short-term investments (< 3 months). Minority interest and preferred stock can also be included in the enterprise value calculation for a fully diluted view.
TG we-Calculate Editorial Team. (2026). EV/Sales Calculator — Enterprise Value to Revenue Ratio [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/ev-to-sales-calculator
TG we-Calculate Editorial Team. "EV/Sales Calculator — Enterprise Value to Revenue Ratio." TG we-Calculate. 2026. https://we-calculate.com/calculator/ev-to-sales-calculator.
TG we-Calculate Editorial Team, "EV/Sales Calculator — Enterprise Value to Revenue Ratio," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/ev-to-sales-calculator
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