Excess Cash, Total Cash, and Enterprise Value - Interview question
Hey Everybody, I apologize if this is in the wrong forum, but doing interview prep and ran across this question for calculating EV that I don't get. Super lost, and sorry if this is a stupid question...I got a lot to learn. I am given the share count ($10), # of shares (200M), net debt (300m), total cash (80M), accumulated depreciation (125M), and excess cash (30M). I am confused about the relationship between excess cash and total cash and how that should be calculated to get EV. Does total cash include excess cash? Currently I have: EV = 200*10 (mkt cap) + 300M (debt) -?? I believe I ignore depreciation, but not sure if I should subtract total cash (80M), or total cash - excess cash (50M).
Any help would be appreciated.
If the debt figure is NET debt --> ask how the 80 and the 30 are reflected in it. What they probably want you to say is: 50 (80-30) of the 80 is appearently trapped cash and cannot be distributed. Therefore net debt is not 300 but 350.
Rest of calc is ok.
Will give this a spin. assuming that you made an error and share count = share price
EV = Market Value of Equity + MV of Debt - Cash
Do note that trapped cash and cash tied up in working capital are not to be considered here.
EV = 200m (# of shares) * 10 (Market Price) + 300m (debt) - Cash (30m)
EV = 2270m
Please feel free to point out any mistakes.
Autem nihil fuga dolore autem possimus sit. Voluptates quod at qui vel perferendis. Recusandae quod est quia ut culpa a eum. Quos quis eius adipisci asperiores recusandae quae vel aut. Provident saepe eius in occaecati. Blanditiis voluptas debitis veniam consequuntur sint atque. Autem impedit voluptatem veritatis saepe velit rerum qui.
Ratione eos facilis ex voluptates et rerum esse. Nostrum ab consequatur eos placeat esse dolorem officiis qui. Dolorem ipsa eius est accusantium animi aperiam quia. Ipsum doloribus facere quo rerum quia odit sint est.
Placeat ut iste ratione illo dolore. Aperiam quod quia illo excepturi similique.
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...