Enterprise & Equity Value
You're mixing today's market cap with net debt from a 10-Q balance sheet that's ten weeks old. What can go wrong, and what do you adjust for?
Model answer
The bridge items can be stale. Since the balance-sheet date the company may have issued or repaid debt, drawn the revolver, completed buybacks, paid a special dividend, or closed an acquisition or…
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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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