1. What is Equity Value?

Equity Value represents the owner's stake in a business or asset, calculated as the net assets multiplied by the ownership percentage. It shows the monetary value of the ownership interest.

2. How Does the Calculator Work?

The calculator uses the equity value formula:

Where:

• \( \text{Net Assets} \) — Total assets minus total liabilities (in currency)
• \( \text{Ownership Percentage} \) — Percentage of ownership (as a whole number)

Explanation: The equation calculates the proportional value of an ownership stake based on the net worth of the entity.

3. Importance of Equity Value Calculation

Details: Calculating equity value is essential for business valuation, investment analysis, partnership agreements, and financial reporting. It helps determine the fair value of ownership interests.

4. Using the Calculator

Tips: Enter net assets in currency units and ownership percentage as a whole number (e.g., 25 for 25%). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between equity value and enterprise value?
A: Equity value represents ownership value, while enterprise value represents total business value including debt.

Q2: How is net assets calculated?
A: Net assets = Total assets - Total liabilities. This represents the book value of the entity.

Q3: Does this calculation work for partial ownership?
A: Yes, the formula works for any ownership percentage from 0.1% to 100%.

Q4: Should I use book value or market value for net assets?
A: For most accurate valuation, use market values if available. Book values may not reflect current market conditions.

Q5: How does this apply to startup valuation?
A: For startups, additional factors like growth potential and intellectual property may affect equity value beyond net assets.