top of page
  • Writer's pictureThomas Tsang

Enterprise value

Enterprise value is the market capitalisation of ordinary shares plus preferred shares and debts minus cash and cash equivalent. It is the cost to the acquirer when it buy over a company‘s ordinary shares. It is because the acquirer will assume the debts and cash will belongs to the acquirer.

Enterprise value tell acquirer the actual cost when buying the ordinary shares. That is the debts need to pay and the cash you have in the company.

8 views0 comments

Recent Posts

See All

Impairment test under US GAAP

Under US GAAP, the carrying amount of the assets is compared to the undiscounted future cash flow of the assets generated. If the amount of undiscounted cash flow is highr than carrying amount, no im

Discount on enterprise value

When apply discount on lack of marketability (DLOM) and lack of control (DLOC) on enterprise value (EV), it is a multiple of EV x (1-DLOM) x (1-DLOC). But apply the discount on Equity value would lowe

Equity instrument

In accordance with SFRS109, investment in equity instruments must be subsequently measured at fair value. In limited circumstances, cost represents the best estimate when recent information not avail

bottom of page