Enterprise & Equity Value
How does an equity-method investment (associate) interact with both EBITDA and the EV bridge? What's the consistency trap?
Model answer
An equity-method investment (20-50% ownership, not consolidated) shows up as a single 'equity in earnings of affiliates' line BELOW the operating lines, so it is NOT in EBITDA. Therefore you must…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
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?