Calculator
Equity bridge calculator
Move from enterprise value to the equity value actually paid, line by line — cash and cash-like items, debt and debt-like items, and the working capital adjustment. Everything is calculated in your browser; nothing is uploaded or stored.
This calculator handles the arithmetic. Classification of items as debt-like, treatment of restricted cash, consistency with the multiple, and negotiation of the working capital peg are judgment calls that sit outside any tool.
Inputs
Enter values in any consistent currency unit (thousands or millions). Enter every figure as a positive number — the bridge applies the correct sign.
Cash and cash-like
4,500Debt and debt-like
24,500Working capital
(700)Treatment depends on locked-box versus completion accounts mechanics.
The bridge
- Enterprise value
- 85,000
- 4,500
- Cash and bank balances4,200
- Restricted cash0
- Other cash-like items300
- (24,500)
- Bank debt and term loans(14,000)
- Revolving facilities and overdrafts(4,000)
- Lease liabilities(3,500)
- Deferred and contingent consideration(1,200)
- Pension and employee liabilities(900)
- Accrued interest(250)
- Other debt-like items(650)
- ± Working capital adjustment
- (700)
= Equity value
64,300
Price per share: 6.43
Indicative only. The treatment of each line is a negotiated position governed by the sale agreement, not an accounting result.
01
How the bridge works
Enterprise value is what the operating business is worth on a cash-free, debt-free basis. It is what an EBITDA multiple produces. It is not what the seller receives. The equity bridge converts one into the other by adding what the buyer acquires beyond the operating business, deducting what the buyer inherits in obligations, and correcting for the level of working capital delivered at completion.
Most value leakage in a transaction happens here rather than in the multiple. A single debt-like item missed in diligence, or a peg set on an unadjusted trailing average, moves proceeds by more than a quarter turn of EBITDA on a typical mid-market deal.
Equity value
Enterprise value + cash and cash-like items − debt and debt-like items ± working capital adjustment.
No double counting
Any balance deducted as debt-like must be excluded from the working capital definition, and vice versa.
Consistency with the multiple
If the multiple was set on a pre-IFRS 16 EBITDA, lease liabilities belong in the bridge; if not, they do not.
Completion, not signing
Balances are measured at the completion date under completion accounts, or at the locked box date where that mechanism applies.
02
Common questions
What is an equity bridge?
An equity bridge is the schedule that moves from enterprise value — the value of the operating business — to the equity value actually paid to shareholders, by adding cash and cash-like assets, deducting debt and debt-like items, and adjusting for any difference between actual working capital at completion and the agreed peg.
How do you calculate equity value from enterprise value?
Equity value = enterprise value + cash and cash-like items − debt and debt-like items + (actual working capital − working capital peg). Each line must be defined in the sale agreement so that no balance is counted twice or omitted entirely.
What counts as a debt-like item?
Any obligation that behaves economically like borrowing even if it is not labelled debt: pension deficits, unfunded employee benefits, deferred consideration, unpaid capital expenditure, factored receivables, disputed tax, declared but unpaid dividends and onerous contract provisions.
Why does the working capital adjustment appear in the bridge?
The multiple assumes the business is delivered with a normal level of working capital. If actual working capital at completion is below the agreed peg, the buyer must fund the shortfall and the price is reduced accordingly; if it is above, the seller is paid for the excess.
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