Enterprise value | Stocks and bonds | Finance & Capital Markets | Khan Academy
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- Опубліковано 19 сер 2009
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Solving the P/E conundrum by looking at a different valuation metric (enterprise value).Created by Sal Khan.
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Excellent video. Thanks!!
Great video series, keep up the good work!
Excellent explanation!
How do you decide what multiple to multiply by?
@aszabo1234 I'm not sure I follow you question correctly but there are different ways to buy a 'company' - you could 1) Purchase all the equity, i.e. shares (I think this is what you're referring to), 2) purchase the operating assets of the company (e.g. purchasing the machines/plant/equipment and nothing else) or you could 3) purchase the debt and equity of the company (what Sal refers to in his video). Which method is used depends on the goal of the purchaser. Hope that helps....
Hi Khan,
Just wanna say that you are blessed with having special ability to teach.... to make something complicated seens easy! Amazing! Keep up the good work and I can't wait for your series on valuation for startups... you will be producing them, I hope:)
yes.
relative valuation. If a comparable company trades at 9x EV, you may use that multiple for the company you are trying to value.
Can I consider "Reserves & Surplus" as part of company's cash
Market Capitalization is the value of equity? I Thought market cap was price per share x shares outstanding
Hi Salman,
same question. not sure how he came up with a multiple of 6.
So EV is used for how much money you will need if you are going to overtake a whole company right. Including the working assets, liabilities and stock. Am i right.
Ok, I'm trying to study up for an Investment Banking course... in what order, from the top (ie: income statement) should I be watching these videos??
Guys, embrace this awesome opportunity provided by Khan Academy. Check it out:
www.khanacademy.org/economics-finance-domain/core-finance
And there are also videos on many other subjects apart from finance. Hundreds and hundreds of videos.
Do you do anything with tax returns? I always used to get a decent amount of cash returned to me.
The most recent tax refund I got was four times less than what I normally get. Why did that happen? Is it b/c I had to use the tax person at work? Was he trying to keep money for the business? I've never used a CPA or tax person at work before. My ex-husband always got me back a decent return.
at 14:21 why do u have to apply an assumption of 6 PE?
You can average out the PE you got from the previous example. 9 and 5 /2. More companies with similar profit would be better to get the ballpark of the industry price range.
I know I’m commenting on 6 yrs ago commenting but could be useful to someone else from future.
Correct me if I'm wrong. To find what a company should be trading at you do (EV + Cash - Debt) / # of shares.
+Miles Blake (Equity + Debt - Cash)/shares or simply the operating assets/shares or market cap (price * no. of shares) + debt - cash & cash equivalents
Khan misspoke. EV=MarketCap + Debt - Cash. If you acquire a company you are obligated to pay off his debts. You can always use the Cash inside his cash registry to pay off those debts, which is why Cash is minus
10000 number of shares is part of the trick because this little chunk is 10k and that big chunk is 10k, even though varying per amount of share could still make them equal. But obviously, share per dollars are either 10 dollars or 100 dollars or so? They will appear totally different, I guess. How would you address this tricky number!!!???
lol I walked into this video expecting to hear how much the Star Trek Enterprise was worth haha
This is confusing because debt is a part of equity ?_?
no debt is part of the assets (debt is the opposite of equity)