What is enterprise value? - MoneyWeek Investment Tutorials
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- Опубліковано 16 гру 2010
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if he had been my teacher in school, I would have been a professor by now. Never had I met a person who could explain something in such a great fashion. Thank you Sir!
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Tim Bennett is just too good! Clear, precise and sans jargon.
Thanks! I am doing an internship in M&A and had a bit of trouble grasping this concept. You explained it very well!
Superb video! Thanks for explaining the concept in such a simple way.
Such an excellent communicator.
I get that "net debt" is sort of what the banks paid for the assets, but I don't get why "market cap" is what the shareholders paid. Take Amazon for example. Most shares were issued at IPO price which was much less than current price.
cost of opportunity of the shareholders cash
Thank you! That was amazingly helpful with the mortgage analogy.
Thank you, very clear and concise!
Terrific video. Thanks a ton, Tim!!
This is video helped me out alot. Thanks!
clear explanation with good examples. Thank you!
Love, love your simple videos. I wish I had you as an instructor 35 years ago, but now I finally found you. You make ratios fun!
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Thank you. I have got here to know that why we subtract the cash item, and I got it!
Will be following you around the internet
men you the best. Economy is life and is everything we breath, i dont understand why people make it to be so complexe and complicated. This guys explanation can create great economists and accountants li
Thank you Teacher.
Thanks man!
Very well explained.
Tim Bennett is the best 🙌🏼
Superb. Thank you.
Sir, is the money from the shareholders counted into cash saving used to calculate the net debt?
I was hoping for an in-depth explanation of the concept with complicated issues . Hope you make the same
So what should I use instead of market cap if I am valuating a firm that do not have stocks.
if the debt or the equity contribution has been used to fund operations and not asset purchases ...then is there a change in enterprise value....
I was wondering how EV could help us to find whether or not the current stock price is worth buying?
really helpfull
awesome thx
So let me get this straight... if net cash is higher than net debts, one would assume the additional cash is baked into the market cap... that's why you subtract it because in theory you are just getting it back ? Think I finally understand
Very good
A small clarification
What if the company already has assets, on which it has redeemed the mortgage, but also has taken a mortgage on a new asset, which it has acquired and on which it's paying off debt. Won't the enterprise value, in such a case, also include the market value of the assets
Not the funding is valued, what is valued is the residual interest in the assets. The valuation derives from the cash-flows generated by the assets. The external market value for all the EV elements is the result of guessing the residual interest in the Total assets.
How does convertible preferred equity factor in
why is debt added and not minused in the EV equation?
i would have thought the companies value would be market cap minus debt. not plus debt?
Awesome. What if the company has more cash than debt? That would make the formula look like this: market cap plus the negative cash amount; does that mean the EV naturally excludes the company's cash on hand?
Thanks for commenting, I’d rather advise you look up to investing and making huge profit in Bitcoin with Mr José Smith he’s currently managing my crypto portfolio and making great return’s.
How do i thank u?
Can EV be negative? And that means cash more than debt?
Greetings ! The presenter started with the narrative that total assets and how they are funded is more relevant. Thus, assets are taken at its book value. Why then equity is taken at market value? Market value is a mix of intrinsic value and speculation
Sir,
I had a doubt.
If anybody want to buy a whole company, he needs to pay amount equals to Enterprise value(Market capitalization+Debt of a company-Cash reserves).
Market cap is calculated with outstanding shares and current market price. Here we are not considering promoter holdings, then how can we buy the entire company with based on market cap value.
For example, consider a company X is having 90% promoter holding and 10% outstanding shares with zero debt and huge cash reserves. Then if anybody wants to buy this company, does it possible to buy at enterprise value where outstanding shares are very less compared to promoter holding, no debt and huge cash reserves. I am confused with this concept.
Could you please clarify my doubt and help me on this. I will be thankful to you a lot.
sanapala murali Don’t forget about pension deficits and minority interests
where is the liquid asset?
Wow! You only spend £100 in total on Christmas presents? PLEASE do a video showing us how! :P
Why not ev to free cash flow?
"What would someone pay to buy Tesco?" -> Isn't this the market cap? If you manage to buy all the shares on the market, you pay the value of market capitalisation, not EV??
namsate sir
So the more debt I can get the higher my value will be. I see why so many people go broke.
Never understand this metric, for example if I have a bussines that sell 100$ bills for 90$ each, to sustain it and cover the losses I borrow a million dollars from the bank each week, so in the end of the year its enterprise value will be 52 million dollars??? 🤣
Wait, so net debt adds to enterprise value?
You add net debt to the market capitalization to get to the enterprise value
i wonder also. i think should be deducted. unless i this example the cash is more than debt
@@oneth789 I got the same struggle. He added the debt to the total EV value 🤔. So the more debt you take the higher your company is valued?
You do, on the other hand, got the money but only in the form of a debt. But that would also equal zero.
150 million in capex claims
It is an easy way to understand that I cant understand in my finance book.
Pretty useless metric. I would rather have a list of items owned by a company. If someone wants to buy a company altogether, the price of the shares will increase immediately.