Hi - just a clarification about enterprise/equity values and how they apply to M&A cases. When the case is about purchasing the entire company, only the enterprise value should be used (calculated through DCF) but when the case is about buying individual shares as an investment, then equity value is what's relevant (calculated through market cap)?
M&A cases - Enterprise vs Equity value
EV is used to value a company according to a standard that allows you to compare it to other transactions and companies based on fundementals of the business. If you are looking to "buy" a company, that would be equity value.
Are you talking about consulting interviews or PE interviews? In consulting interviews debt and cash are not considered and thus you are calculating just the "Value" of the company that is a very simplified version of an equity value
Investments or single business cases need to be evaluated based on a certain set of criteria. Since financial performance is the key criterion in most cases you need to have an idea about future financial impacts. A key tool to asses this impact is the cost-benefit analysis which is used to determine the net effect of potential revenues and costs.1 Q&A
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Der Klient ist eine französische Holding, welche einen jährlichen Umsatz von €1 Milliarde hat. Sie halten fast alle Arten von Unternehmen, die meisten in der „Low tech Herstellung“, darunter unter anderem auch „Öl & Gas“ und „Automobil“ Firmenteile. Es gibt keinen bestimmten Bereich auf den sie ihr ... Ganzen Case öffnen