Enterprise & Equity Value
What actually qualifies as 'cash and equivalents' that gets netted in the EV bridge?
Model answer
Cash equivalents are highly liquid instruments with short original maturities (the accounting convention is roughly three months or less): money-market funds, T-bills, commercial paper, bank…
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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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