Valuation Question - What is considered to be cash equivalents?
In the EV calculation, what is considered to be cash equivalents? Is it only very short term and liquid investments?
Would you subtract long-term assets from the EV calc? For instance, bonds, pref shares intended to be held for a long time?
The reason I'm bringing this up is that if you don't subtract these longer term assets, can't you artificially increase the EV of a company by holding more long term securities instead of shorter term instruments?
Thanks.
Yes, you're correct. You have to subtract long-term/equity investments when calculating EV.
Numquam quam sed occaecati modi modi impedit sed eligendi. Minus ea vitae ratione est.
Commodi aspernatur cumque deleniti adipisci a enim ducimus. Minus rerum repellat expedita maiores quaerat. Error molestiae delectus officiis maxime dignissimos. Numquam dolorum accusantium aut occaecati aperiam recusandae deleniti ut. Qui ad dolor quae dolore.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...