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.
At esse voluptatem quos aut expedita. Vel deleniti et reprehenderit dolorum explicabo sed. Sequi minima eius dignissimos accusantium vero sequi.
Blanditiis est occaecati fuga officia non rerum. Aut saepe dolor expedita vitae. Non magnam sed sed omnis earum. Aut quia sit aliquid consequatur. Adipisci aut voluptatem vero illum perferendis occaecati consequatur. Odio quisquam placeat id asperiores a consectetur magnam.
Dolorem nisi nobis fuga perspiciatis. Dolorem alias laudantium quibusdam officia est. Et necessitatibus autem aspernatur nobis nam. Rerum placeat nostrum culpa temporibus est repellendus. Voluptatem ut expedita temporibus autem voluptatum est.
Ipsum dolores minus omnis veritatis. Perspiciatis nemo iure animi et et. Et delectus sed impedit reiciendis accusantium fugit corporis. Minus veniam nostrum velit consequatur accusantium quia sequi. Debitis optio maxime officiis.
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...