Enterprise & Equity Value
Are marketable securities classified as short-term investments treated the same as cash in the EV bridge?
Model answer
Generally yes - short-term marketable securities and other liquid investments are non-operating assets readily convertible to cash, so they're subtracted in the bridge alongside cash (sometimes…
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More from Enterprise & Equity Value
- What's the difference between enterprise value and equity value?
- Why do you subtract cash when going from equity value to enterprise value?
- Why is enterprise value capital-structure neutral but equity value is not?
- A company issues $100 of new debt and holds the cash on its balance sheet. What happens to EV and equity value?
- Which valuation multiples pair with enterprise value vs. equity value, and why?
- How do you calculate fully diluted shares?
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