Hello fellow monkeys,
How to define EV?
M&I defines it as: Value of ONLY the core business operations, but to ALL investors (equity, debt, etc)
McKinsey defines it as: Summing the value of operations and nonoperating assets gives EV
For me, this seems like two different definitions. Would any of you fine gentleman take the time out of your day to help me out? :)
| +152 | How to stop feeling like shit for not making it in IB? | 57 | 4h | |
| +115 | If Tik Tok is forced to sell, what banks do you think would be involved in the deal? | 58 | 3h | |
| +80 | Updated LA Banking Scene (2024) | 57 | 4h | |
| +38 | Ranking banks that went under | 20 | 11h | |
| +34 | Burnt Out M&A ASO | 18 | 9h | |
| +32 | A strategy for SA applicants late to the game like myself | 15 | 15h | |
| +30 | Relevance of A-Levels for U.K. London recruiting | 21 | 23h | |
| +26 | Series 79 Help / Tips to Pass The First Attempt | 11 | 2d | |
| +26 | Intern Ettiquette | 4 | 19h | |
| +23 | What are hours like at BBs in London? | 47 | 17h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
I’m not sure you got the McKinsey reference right? You should deduct non-operating assets, i.e. cash to arrive to an EV
I believe M&I has the better definition. EV is essentially the market value of net operating assets of this company, which explains why we subtract the cash and short term investment and add non controlling interest.
bro learn to comprehend; they are both saying the same thing, just different wording.
Nah I disagree the McKinsey one isnt right
I'm not sure where you're getting that McK definition. In their book "Valuation" (which btw is the best book on valuation to really understand concepts and how to connect theory to practical applications) they define EV as the sum of the firm's operating assets less its operating liabilities, which is the correct definition. I took a valuation class with the guy who wrote the book
McKinsey Valuation 7th edition page 180
Don't define it by the numbers. Define it by the concept.
The concept is that EV is the value of a company's core business operations. It excludes cash and other non-core items.
You measure the EV by all the stuff people are talking about above.
Btw, that definition of EV above doesn't look right...it can't be operating assets less operating liabilities. That gets you to a version of equity value. But EV is supposed to be equity value + net debt.
Non omnis magnam repudiandae veritatis quis non id. Eaque asperiores odio consequatur in voluptas id. Non laudantium dolor rerum officiis earum quaerat facilis. Consequatur voluptatum dolor magni ea eveniet. Delectus consectetur harum aut animi consequatur nostrum harum.
Rerum ut voluptatem sed perferendis tempora. Odio consequatur sit voluptatem quo deleniti. Tempora est inventore eos ratione veritatis reprehenderit inventore. Laudantium placeat quasi aliquid placeat voluptate ut possimus. Eius dolore quo at.
Commodi corporis quo aut qui enim. Omnis ut nulla est maxime. Qui recusandae sunt atque ipsam officia qui. Veritatis quia voluptatum occaecati quidem aut qui. Autem nulla temporibus qui saepe.
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...